Monday, June 27, 2016 - 14:10
Crowdfunded mortgages gets green light on Dutch market
Crowdfunded mortgage startup Jungo got the green light from the Dutch authority for financial markets AFM, both AFM and a spokesperson for Jungo told NU.nl. According to the founders, Jungo is the first company in the Netherlands to provide mortgages of which part is funded by private investors. With Jungo a fifth of the total mortgage is raised through crowdfunding. The idea is that everyone can invest in mortgages. "Individuals prefer not to invest in a product that is fixed for 30 years at the current low interest rate of 1.8 percent", co-founder Vincent van den Noort explained to NU.nl. Jungo therefore shortens the period to a maximum of 8 years and a target return of 3 to 3.5 percent. The other 80 percent of the mortgage is funded by an institutional investor. Jungo is still negotiating with this investor, but Van den Noot does not see any problems arising. The risks will be shared - Jungo and other investors will all contribute to a so-called guarantee fund. Jungo will not offer higher mortgages than banks. And all applicants still have to comply with the current credit requirements. But getting a mortgage through Jungo should be cheaper. "Due to new international guidelines, banks are required to hold higher buffers for a mortgage. These rules do not apply to individuals." Van den Noort said. The startup company aims to launch their new mortgage model in the second half of this year.