Armed with credit licence, Xinja enters Aussie home loan fray

Home loan fintech Xinja has raised over A$2 million through equity crowdfunding, and hopes to become a bank.

Australia’s banking titans – Commonwealth Bank, ANZ, Westpac and NAB – are the biggest companies in the country. But Xinja, a Syndey-based fintech founded late 2017, couldn’t care less.

With no shortage of ambition, the plucky startup is shooting for a banking license and hopes to undercut the big four with faster services and better deals - all completely online.

“Xinja will completely revolutionise the market here and give people the opportunity not to have to wait six weeks for the bank to deign to give them a mortgage,” said Eric Wilson, Xinja’s CEO.

“We are bringing technology in from overseas and it will allow us to give you a completely approved mortgage – none of this pre-approved nonsense from the bank – in about twenty minutes from the moment you hit send.”

The company was granted a credit license recently, which allows it to make some types of loans. But the company intends to go a step further and become a bank.

But becoming a bank – which would authorise Xinja to accept retail deposits, which are guaranteed by government – is no mean feat. It requires getting a banking license from the finance cop APRA.

Banking licenses are difficult to get and rarely given, with only one being granted the past two years.

Digital home loans take off in Australia

Xinja is not the first online lender to try its hand in the online home loan sector.

Fellow Australian start-up, Tic:Toc began in 2015 promising to approve home loans ‘in as little as twenty-two minutes, not twenty-two days’. 

Other companies offering digital mortgages or brokerage include Westpac-owned broker uno Home Loans, NAB-owned UBank, and Kim Cannon’s Loans.com.au. All of them offering lower mortgage interests, hovering around 3.5% compared to Australia’s Big Four Banks which average out around 5.2%. The difference of 1.7% could mean savings of over A$370,000 on a 30-year A$1,000,000 mortgage, the average price of a Sydney home. 

The Australian Competition and Consumer Commission released a report singling out the Big Four Banks for “less-than-vigorous” competition and a lack of transparency among banks in providing information to customers. The slowness of the Big Four, described as having ‘moved like a flock of sleep for years’ by RateCity editor, Sally Tindall, can explain why tech-savvy Australians are firing up the digital loan market.

Want to find out more about online home loans? Join our Digital Mortgage Lending Panel with Anthony Baum, Founder, Tic:Toc, Vincent Turner, CEO, uno Home Loans and Ruth Hatherly, Founder, Moneycatcha in AltFi’s Australasia Conference 2018 on 16^th April, in Sydney. Early Bird Tickets still available.