Amsterdam-based challenger bank bunq has announced that it will become the first European digital bank to start offering mortgages. The neobank has joined Dutch lending platform Tulp to deliver the service, which it expects to roll out in early 2022. The Dutch fintech will offer mortgages to its users from early next year, as it seeks to challenge traditional banks’ grip on the home-lending market. Mortgages are seen as an uphill struggle for digital banks around the world, representing an opportunity to onboard users for the long-term and offering a source of sustainable income in an industry where many struggles to turn a profit. By taking the first steps into mortgage lending, bunq wants to be at the forefront of innovation in digital banking. The company’s mortgages will initially be available in the Netherlands. Approximately two-thirds of bunq’s home loans on its balance sheet will be covered by the Dutch government’s insurance scheme, which guarantees homes up to €355,000 (amounts for 2022) in the event the borrower defaults.
Founded in 2015, the firm is a privately owned lending platform. It offers mortgage lending and funding management services. Tulp enables parties to build up and manage mortgage portfolios in The Netherlands. The company is active in the Dutch residential mortgage market and in the buy to let market. Tulp claims that it was the first lender to introduce a green buy to let mortgage under the brand De Nederlandse. With four securitizations in the market and a fifth upcoming, Tulp is an active player on the international financial markets. Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations and selling their related cash flows to third party investors as securities. Currently, bunq is available in 30 European markets including the Netherlands, Germany, Austria, Italy, Spain, France, Belgium, Ireland, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, Greece, Hungary, Latvia, Lithuania, Luxembourg, Malta, Poland, Portugal, Romania, Slovakia, Slovenia, Sweden, the United Kingdom, Norway, and Iceland.