Rate and Betterment Partner on Mortgage Incentives

- Betterment provides automated investment services to over 800,000 clients, with more than $40 billion in assets under management as of August 2023. The platform's user base primarily consists of tech-savvy individuals, particularly millennials and Gen Z, who are focused on long-term financial goals like homeownership. - Rate, formerly known as Guaranteed Rate, is the second-largest retail mortgage lender in the United States and has been recognized as a top lender for first-time homebuyers. The company has a history of focusing on digital innovation, including its FlashClose℠ technology platform. - The partnership aligns with a broader industry trend of collaborations between fintech companies and mortgage lenders, which aim to streamline the lending process through technology and expand access to credit. - Betterment's typical client has a median age of around 40 and pays an advisory fee of approximately 0.25% of assets under management. This partnership provides Rate with direct access to a large pool of financially engaged potential homebuyers. - This collaboration comes as many potential homebuyers are concerned about high interest rates; mortgage incentives like rate buydowns or fee credits are key strategies lenders are using to make homeownership more affordable. - In June 2024, Rate was the first 100% retail non-bank lender to re-enter the Prime Jumbo Residential Mortgage-Backed Securities (RMBS) market since the pandemic, a move intended to provide more liquidity for jumbo loans.