Bunq banks on mortgages

By Aisling Finn on Wednesday 29 July 2020

Digital Banking

The challenger bank has set aside €100m of customer deposits to fund its mortgage offering.

Bunq banks on mortgages
Image source: Ali Niknam/Bunq

Dutch challenger bank Bunq has become the first digital challenger bank to offer mortgages. 

Unlike its peers, many of whom offer customers loans in the form of overdrafts, Bunq has chosen, instead, to help its customers become homeowners. 

To fund its investments, the challenger has entered into a partnership with third party broker, asset manager NN IP, who will offer the loans and is also diverting 25 per cent of its user deposits, worth around €100m. 

Bunq’s mortgages will only be available to its Dutch customers and two-thirds of Bunq’s home loans will be covered by the Dutch government’s insurance scheme, which guarantees homes up to €310,000 in the event the borrower defaults. 

Ali Niknam, founder of TransIP the third biggest domain name provider in the world and CEO of Dutch challenger bank Bunq, said: “To many people, owning a house is an important step in experiencing true freedom. We are proud to be a part of that great feeling!” 

Just like with other investment opportunities on Bunq, users of the challenger bank can choose to invest in the personal mortgages if they choose to. 

The bank says the move comes after “many Bunq users expressed their desire to help people experience the freedom of owning a house.” 

Bunq has one of the most dedicated and active customer bases, with updates to its features being voted on by its users, including this one. 

Most recently, Bunq allowed its users create their own charitable foundations through the app and pick where their money is donated, for instance to a local school for extra equipment or supporting local businesses that are unable to open during Covid-19. 

The challenger bank also has a keen focus on sustainability, most notably the bank has helped its users planted nearly 710,000 trees through its Green and SuperGreen account offerings. 

According to the fintech, 72 per cent of its customers currently choose eco-friendly companies as their investment preference. 

Back in May, while speaking at the AltFi Digital Summit, Niknam also revealed that, despite the economic turmoil, Bunq was “not that impacted by coronavirus.” 

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