According to Forbes, Wealthfront has launched digital mortgages starting in Colorado with rates 0.55% to 0.70% below the national average. The 17-year-old company reported $339 million in revenue and $123 million net profit for the year ending July 31, 2025, and is now licensed in 19 states including upcoming launches in California and Texas. CEO David Fortunato revealed they’ve been considering mortgages since 2018 but waited for better digital infrastructure. The company filed for IPO in late September but faced delays from the government shutdown, with Fortunato declining to comment on the current timeline. Wealthfront’s mortgage rates target borrowers with FICO scores above 780 and home purchases of at least $750,000, promising roughly 0.50% lower rates than average.
The rate advantage playbook
Wealthfront is basically doing what they’ve always done – undercutting established players on price. They started in 2011 charging just 0.25% for robo-advising when traditional advisors were at 1.3%. Now they’re taking that same approach to mortgages. But here’s the thing – can they sustain those rate discounts long-term? Mortgage margins are already razor-thin, and they’re planning to fund these through bank credit lines and United Wholesale Mortgage backing. That’s not exactly the cheapest capital source out there.
The digital mortgage experience
The company claims technology has finally caught up to make digital mortgages work properly. They’re talking about counties digitizing records and electronic income verification – stuff that Rocket Mortgage has been doing for years. Their big innovation seems to be a Domino’s pizza-tracker style app that shows borrowers exactly where they are in the process. Honestly, that sounds useful given how opaque mortgage applications can be. But is a progress tracker really enough to compete in this crowded space?
IPO implications
This mortgage launch comes at a crucial time – right as they’re trying to go public. The government shutdown definitely threw a wrench in their plans, but now that the SEC is back online, we’ll probably see movement soon. Adding mortgages could help their valuation story by showing another revenue stream beyond their core investing business. But I wonder if investors will see this as diversification or distraction. Mortgage lending is a completely different beast with different risks and regulatory hurdles.
Market impact
Wealthfront’s targeting a specific segment – high-credit borrowers buying expensive homes. That’s where the profit margins are, but it’s also where competition is fiercest. Their rate advantage looks impressive on paper, but we should check those numbers against the Freddie Mac Primary Mortgage Market Survey to see how they really stack up. The bigger question is whether this signals a new wave of fintechs moving into traditional banking products. If Wealthfront can make this work, we’ll probably see other robo-advisors following suit.
