A software deal in the Mortgage market

Fintel (LSE:FNTL), the provider of software, data and support services to UK financial intermediaries, has bought the rest of Mortgage Brain Holdings. In an announcement published on 23 October 2026, the company said it had acquired the remaining shares for £38.4m, net of cash acquired. Fintel already owned 5.8% of the business, having bought that stake in March 2024 for £1.5m.

The central question is how far the deal changes the shape of Fintel's earnings, and at what cost to its balance sheet. Mortgage Brain supplies mortgage sourcing, criteria, affordability, customer relationship management and submission tools, and its Subsidiary AE3 Media runs digital media, events and insight platforms. Fintel said Mortgage Brain's contracted customers write about 40% of UK first-charge residential and buy-to-let mortgage applications.

What Fintel is paying and how

Of the consideration, £28.9m was paid on completion from existing resources, with the remaining £9.5m deferred for 18 months. The announcement mentions cash only, with no new shares issued. Fintel said pro forma Leverage would be 2.54 times immediately after the transaction, a figure that assumes £80m drawn on its £120m revolving Credit facility, the deferred payment, group cash and Lease arrangements under IFRS 16. It expects leverage to be below 2.5 times at the year end.

Management expects Mortgage Brain to generate Revenue of about £12m in 2027, of which about £10m would come from software and data products and about £2m from mortgage-related events, with expected EBITDA of about £3.8m. These are company projections, not reported results, and no historical financial period for Mortgage Brain was given. On our arithmetic, the net consideration equates to roughly ten times that projected EBITDA, though this ignores the stake Fintel already held.

Why it matters for the group

Fintel (LSE:FNTL) said the deal strengthens its Software & Data division and positions it as a software provider across wealth, mortgage and multi-disciplinary advice firms. It builds on a two-way product integration with Plannr, in which Fintel holds a 49% strategic stake. Zahid Bilgrami, Mortgage Brain's chief executive, will lead the Software & Data division. Chief executive Matt Timmins described Mortgage Brain as a high-quality software Business with a solid base of recurring revenues, although the announcement did not quantify the recurring share.

The company expects the Acquisition to be Earnings enhancing in the 2027 financial year after about £2m of interest on incremental borrowings and about £1.5m of additional Amortisation of intangible assets. That expectation is guidance rather than a result. The shares were about 161.0p at the close of the 2 November session.

Risks and dependencies

Higher borrowing increases Fintel's sensitivity to interest rates and to any slowdown in trading, and leverage above 2.5 times leaves less room for further acquisitions until Debt is reduced. Mortgage Brain's revenue is linked to activity in the UK mortgage market, so lower lending volumes or adviser consolidation could affect demand. The roughly £2m events component may also be more cyclical than software subscriptions.

Integration is a further dependency. The expected benefits rely on retaining customers and staff, combining products with Fintel's existing tools and delivering cross-selling into its intermediary base, none of which is certain. The board said the acquisition should help it capture a growing pipeline of enterprise opportunities, but it did not quantify that pipeline or set targets for it.

What to watch next

Fintel's next scheduled financial disclosure was not dated in the announcement. Investors will look for confirmation of year-end leverage, any update on Mortgage Brain's contribution and evidence of revenue synergies within the enlarged Software & Data division. The deferred £9.5m payment falls due about 18 months after completion, which places it in 2028. Progress against the 2027 projections will be the clearest test of the deal.