Banks know that the future of mortgages is online. COVID has only accelerated that trend.
In the last few years, we’ve seen big banks roll out all kinds of online mortgage gizmos. They tout instant mortgage decisions, easy online applications, secure document uploading and so on. But, to date, I've seen very little that’s truly extraordinary in terms of improved function or savings from a major bank’s mortgage website.
Now, along comes BMO. It recently launched its new “Digital Pre-Approved Mortgage.” Is it breakthrough? Well, not exactly. But is it an improvement on BMO’s current pre-approval options? Yes.
Let’s dig deeper.
The bank’s Digital Pre-Approved Mortgage (we’ll call it BDPAM so we don’t have to type as much) lets you get pre-approved online in minutes. It then locks in your rate for 130 days.
Assuming you qualify, you’ll get pre-approved instantly after submitting the application. That provides quick peace of mind that your rate is guaranteed, letting you home shop with confidence.
After the pre-approval, a BMO mortgage specialist contacts you to assist with the full approval, once a property is selected. The mortgage specialist verifies your documents, arranges the appraisal and is available for questions until the mortgage closes.
Dot Tip: If you apply for a pre-approval online, regardless of the lender, remember that pre-approvals are based mainly on the initial information you provide. If you cannot support the information you provide, the bank may reverse your approval later.
BMO's Digital Pre-Approved Mortgage has things going for it:
Banks have finally realized that millions of Canadians don’t want to meet in person with a mortgage specialist or drive to a branch to get a mortgage. It’s great to see banks like BMO doing more to serve this market.
That said, BMO’s Digital Pre-Approved Mortgage is a minimum viable product, nothing earth-shattering. It’s a conservative opening move in preparation for the online mortgage wars that lie ahead for Canada’s banks. And like the mortgage sites of its bank peers, BDPAM seems like it was designed not to cannibalize BMO’s existing branch and mortgage specialist networks.
In other words, while it offers some perks and improvements, it’s an intentionally "safe" interface meant not to upset the bank’s legacy mortgage origination channels. And you can't blame the bank for that. The problem is, “safe” won’t win you market share.