This Singapore Start-up Wants to be the Trivago of the Mortgage World
RedBrick’s founder says it is all about trust
PHOTO CREDIT: Getty Images
Eugene Huang knows the mortgage business like the back of his hand. He spent eight years at Standard Chartered Bank—first as a mortgage advisor, then eventually as the head of a 70-strong sales team, handling SGD24 billion in loan books.
Still, he felt he could do more to help his clients. “As a salesperson, I’ve always believed that the bank is not the one paying my salary—it’s the customers who do,” Huang says.
“Working for the bank meant I had to work hard for my bonus, and my bonus didn't come from giving my best customers deep discounts on their lending rates. I felt that my clients’ interest and mine, as an advisor, were not aligned,” he explains.
This sentiment prompted Huang to build RedBrick Mortgage Advisory, a platform that allows property buyers to compare interest rates and mortgage package offerings from banks in Singapore. “We aim to be to the mortgage world what Trivago is to the travel industry,” he says.
He founded RedBrick with a friend who owned a web development company, but his co-founder left six months after its launch. The company was registered in 2011 and began operations in 2014.
Over the last three years, RedBrick has financed about 2,700 properties and about SGD2.5 billion in mortgages. Its pool of mortgage advisors had grown from three when they first started, to about 30.
A platform to compare rates
The way it works is that buyers can go to the RedBrick website—which they’ve probably discovered through friends or property listing sites—and compare mortgage rates of various banks. A few minutes after they click the “Enquire” button, one of RedBrick’s advisors will give them a call and help them navigate through more than a hundred mortgage packages. The advisor will then ask if they wish to meet in person in order to help with the documentation for loan processing and see how the loan can be structured in a cost-effective way. The loan advisor will then forward the loan application to the bank of the client’s choice.
Most banks, Huang says, give them priority on loan processing, partly due to their large transaction volume and the quality of their loan applicants.
According to Huang, the typical profile of their clients is 30 to 50 years old, mid- to high-income, tertiary educated, and Internet savvy. Currently, he adds, Singapore’s property market is fueled largely by upgraders—families moving into bigger homes or more central locations—and homeowners “decoupling” their properties. Decoupling, he explains, is when a husband and wife who used to co-own a home chooses to sell this home so that they can buy two properties—one under each individual—in order to save on property taxes and avail of maximum financing.
Edge among peers
Huang says most of their peers in the industry started off as a technology platform for comparing mortgages. But what RedBrick—which earns through commissions paid by banks—is able to offer is expertise and insight.
“My experience was in sales management and face-to-face advisory. Being from a finance background also means we have a deep understanding of processes and product structures,” he says.
He believes that for large ticket purchases like a house, people want to speak with real people and are less likely to transact online. In addition, bank products vary quite a bit and can be complex to compare and understand without an experienced advisor.
Huang says, “Properties are large ticket items, and mortgage interest is the highest expense when you own a property. So being efficient in planning for your mortgage saves you a lot of money!”
All about trust
Huang admits one of their initial challenges was convincing people to trust them. “I suppose the market was still pretty new to mortgage brokers, and because Singapore is small, walking into a bank was very convenient,” he says, adding that many clients were reluctant to meet them and were uncomfortable disclosing their personal information.
As such, the company partnered with bigger brands in order to establish their credibility in the space. “So clients didn’t feel they were talking to a stranger,” he says.
Inquiries started streaming in and soon RedBrick had to recruit more people, which was also a challenge. Many experienced bankers, Huang explains, would much rather work for a big-name bank. “Then I realized that branding was very important—not only towards consumers, but also towards talent whom we want to attract,” he adds.
For RedBrick to succeed, maintaining trust is vital. Says Huang, “It doesn’t matter what kind of services we provide or what kind of products we sell. At the end of the day, we are selling trust. And that will take us as far as we want.”
As for future plans, RedBrick is staying put for the moment. Says Huang, “Put it this way, according to the central bank, there are about SGD230 billion worth of mortgages sitting in Singapore-based banks. We have only transacted SGD2.5 billion. We have 1% market share, there’s 99% to go.”