In an Australian first, a Bank Australia customer signed a fully electronic mortgage on Friday, completing all loan 'paperwork' via her internet banking portal.
Bank Australia will then settle and lodge the mortgage electronically via PEXA, the online property exchange network that allows financial institutions to lodge documents with land registries and complete financial settlements.
Carmel Grant, the customer who signed her mortgage electronically, said that the whole process was straightforward.
"I was able to do it all at home – it was a bonus not having to deliver or scan paper documents. You still need to read the documents, but you can sign them all online. They were clearly set out so it was pretty easy to step through them," said Carmel.
Bank Australia Deputy CEO John Yardley said moving to fully electronic mortgages would save customers time and effort.
"Previously customers had to wait to receive the documents in the mail, find a witness to sign, post the documents back, and then wait again for a reply. The whole process used to take at least seven days and much running around – now we will be able to complete a mortgage on the same day that it gets approved," said John.
"We have been using PEXA for settlements and to lodge mortgage documents since December 2015. Now we can also enable customers to electronically complete their mortgage online. It will really make life easier for people taking out home and investment loans," Mr Yardley said.
PEXA CEO Marcus Price said the fully electronic mortgage moved Australia's $6.5 trillion property market one step closer to a 100% digital future benefiting real estate buyers and sellers.
"This is transformational change designed to bring end customers a better experience. Bank Australia is spearheading this innovation by putting an end to some of the complications, delays and frustrations that typically come with a reliance on paper-based transactions," he said.
Changes were made to the Transfer of Land Act in Victoria to enable electronic mortgages and Land Victoria is supportive of the transition to fully electronic mortgages. The service is currently only available in Victoria.