Most mortgage lenders would rather people didn’t pay off their mortgages early. After all, that’s that’s how they make their money. Indeed, overpayment is positively discouraged and sometimes even penalized. What if there were a solution that solved the technology behind it, alongside the financing arrangements?
That’s the idea behind the Sprive fintech app. This is a “mortgage overpayment” platform aimed at the U.K. market that helps users repay their mortgages faster using automation and cash-back rewards. It claims to save users an average of £10,000 each over the lifetime of the mortgage.
Sprive, which launched in October 2021, now closed a £5.5 million ($7.3 million) funding round led by Ascension, a VC that styles itself as an impact investor. Ascension has also backed mortgage startup Tembo, as well as fintech companies Wagestream, SuperFi, DebtStream, Goodstack, and Credit Kudos (which exited to Apple).
Sprive said the app works by letting homeowners pay off their mortgage faster through their everyday shopping, by automatically putting spare cash toward overpayments and continuously scanning the market to help customers find better mortgage deals.
Users can pay toward their mortgage from a bank account linked to the Sprive app by shopping as they would normally with mainstream U.K. supermarkets. They then use cash-back offers, discount vouchers, and more in order to pay off a mortgage faster. It does this by allowing the user to save money on the interest on the mortgage and shave potentially years off the mortgage term.
“Lenders are looking to innovate in the mortgage industry, but they rely on mortgage advisers for remortgages,” CEO Jinesh Vohra told TechCrunch. “To entice a customer to re-mortgage they rely on mortgage advisers who are are non-digital and fragmented. So it’s very, very expensive to innovate. But we have access to their spending information, their mortgage information, their credit information, and their property information.”
He said Sprive gives lenders a more efficient digital means of being able to acquire new customers. “Every time someone shops or switches mortgages, we make money. Within 15 minutes of shopping, you get money towards your mortgage, and we scan the market every day for better mortgage deals. Every time a customer refinances, we get commission from the mortgage lender.”
Also participating in this round was Channel4Ventures (the consumer investment arm of the U.K. broadcaster Channel4), Velocity Capital, and Two Magnolias.