Most mortgage lenders prefer borrowers not to pay off their mortgages early, as it affects their revenue. Overpayment is often discouraged and may even incur penalties. However, a potential solution addresses both the technology and financing arrangements involved.
This concept is embodied in the Sprive fintech app, a “mortgage overpayment” platform targeting the U.K. market. It assists users in repaying their mortgages faster through automation and cash-back rewards, potentially saving users an average of £10,000 over the mortgage’s lifetime.
Sprive, which launched in October 2021, recently concluded a £5.5 million ($7.3 million) funding round led by Ascension, a venture capital firm positioning itself as an impact investor. Ascension has also supported other startups such as Tembo, Wagestream, SuperFi, DebtStream, Goodstack, and Credit Kudos (acquired by Apple).
The app facilitates faster mortgage repayment by enabling homeowners to use spare cash from everyday shopping for overpayments, while continuously scanning the market for better mortgage deals.
Users can link their bank accounts to the Sprive app and shop at mainstream U.K. supermarkets. Through cash-back offers and discount vouchers, they can expedite mortgage payments, saving on interest and potentially reducing the mortgage term.
Jinesh Vohra, CEO of Sprive, explained that while lenders seek innovation in the mortgage industry, they typically rely on non-digital and fragmented mortgage advisers for remortgages. Sprive, with access to spending, mortgage, credit, and property information, offers lenders a more streamlined digital solution to acquire new customers.
Sprive earns revenue each time a user shops or switches mortgages. Within 15 minutes of shopping, money is directed towards their mortgage, and the app scans the market daily for better deals. When a customer refinances, Sprive receives a commission from the mortgage lender.
Additional participants in this funding round included Channel4Ventures, Velocity Capital, and Two Magnolias.
