Wealthsimple enters mortgage space through Pine partnership

Wealthsimple partners with the “Wealthsimple for home buying” to help customers avoid a “sucker rate.”

Wealthsimple has officially launched into the mortgage space through a new partnership with Toronto-based digital mortgage startup Pine.

Wealthsimple has introduced a new co-branded mortgage product that uses Pine’s digital application platform. This service includes support from Pine’s advisory team throughout the application process. 

According to the companies, users can receive a pre-approval rate in minutes and a formal approval process can be completed in less than 24 hours, which they say is much faster than the typical timeframe of up to three days offered by traditional banks. The mortgage product is available online starting today.

“What we expect is we’re going to be able to beat most mortgages on the market as a result of that.”

“We know there’s a housing affordability crisis going on right now, and since the rates have shot up over the past couple of years, we know a lot of our clients are feeling the pain,” Simon Lejeune, vice-president of growth at Wealthsimple told BetaKit in an interview. “We wanted to go to market with a way to relieve that pain.”

All of the mortgage underwriting and lending will be done by Pine, and through the partnership, the companies say they will be able to offer more competitive rates based on how many assets users have with Wealthsimple. 

Specifically, Wealthsimple’s core, generation, or premium customers can apply for a cash rebate on their mortgage. According to Lejeune, for every $50,000 that customers are able to transfer over to Wealthsimple, the rates will be reduced by 0.05 percent.

“The focus is on the consolidation of assets [and] trying to offer the lowest possible rates to our customers, if they can commit to bring over most of their finances to us,” Lejeune added.

When Pine first came out of stealth in 2022, the startup told BetaKit it was looking to become the “Wealthsimple for home buying.” Lejeune said that stated objective was what prompted the initial conversation between the two companies. 

RELATED: Pine acquires Properly to capture more of the Canadian home-buying process

“We tested a few services and we found that Pine was a really great fit for our clients,” Lejeune added. “They’ve built a very elegant, sophisticated solution.”

In recent years, Wealthsimple has expanded its product portfolio significantly, initially beginning with investing, and eventually growing to include spending, saving, crypto, tax filing, and now mortgage lending. While this latest product represents Wealthsimple’s first foray into the mortgage space, the startup has been teasing the move for some time. 

In August 2023, the company launched a First Home Savings Account (FHSA), and according to a recent LinkedIn post from CEO Mike Katchen, over 30 percent of the first 750,000 FHSAs created in Canada were facilitated through Wealthsimple.

Last month at INNOVATEwest, Katchen spoke with BetaKit editor-in-chief Douglas Soltys about how Wealthsimple planned to approach its mortgage product. Katchen explained that in the typical mortgage process, banks will give approved customers a “sucker rate, and they hope you don’t know that you’re supposed to go negotiate it.”

“When we get into mortgages, our whole philosophy is: how do we look at the entirety of a customer relationship and price that product at the very best possible price on day one?” Katchen said last month. “What we expect is we’re going to be able to beat most mortgages on the market as a result of that.”

Wealthsimple’s mortgage products come on the heels of significant quarterly growth. According to a recent report from The Globe and Mail citing financial results from IGM Financial—a subsidiary of Power Corporation of Canada—Wealthsimple grew by $6.1 billion in the fourth quarter of 2023, and $7.7 billion in the first quarter of 2024. 

Per The Globe, in the fourth quarter of 2023, Power and its subsidiaries, as well as other Wealthsimple shareholders, bought out Allianz Group. Allianz invested in Wealthsimple in 2019 as part of its  $100-million funding round.

Wealthsimple is not the only Canadian FinTech player launching into the mortgage space. Last year, Neo Financial launched its own mortgage product, which Neo co-founder and CEO ​​Andrew Chau had hinted at to BetaKit for several years prior. 

Feature image courtesy of Wealthsimple.

Isabelle Kirkwood

Isabelle Kirkwood

Isabelle is a Vancouver-based writer with 5+ years of experience in communications and journalism and a lifelong passion for telling stories. For over two years, she has reported on all sides of the Canadian startup ecosystem, from landmark venture deals to public policy, telling the stories of the founders putting Canadian tech on the map.

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