Fintech Mesa promises 1% cash back on mortgages, up to 3x on other home needs

Mortgage fintech Mesa has emerged from stealth on Tuesday with $9.2 million in seed capital and a novel idea for homeowners. It’s offering cash back and rewards on all spending done on the home, including the mortgage itself.

Mesa is offering mortgage loans, original or refinancing, that include a credit-card-style 1% cash back on the loan.

In addition, Mesa is offering a points-rewards-type credit card geared toward homeowners. The card lets homeowners accrue points for paying their mortgage and for paying for homeowner-related services like HOA fees, utilities, repairs, home insurance, and day-to-day purchases like gas or groceries.

This is a standard unsecured credit card, meaning it is not related to or secured by the home, and the card issuer partner is Celtic Bank. Card users don’t need to have originated a home loan with Mesa in order to get a card, and the card’s spending limit is determined by the credit history of the applicant. It also carries a typical hefty credit card annual percentage rate, currently in the 20-21% range.

“We’ve just taken what everybody loves about travel and dining cards to re-contextualize that for the homeowner/parent,” Mesa’s founder CEO Kelley Halpin tells TechCrunch. “So it's not rewarding you on travel and dining spend; it's rewarding you on gas, groceries, your HOA, utilities, home goods as well as your mortgage payment.”

True, a homeowner could already earn points on these types of expenses simply by paying with whatever rewards-style card they already have. But Mesa's pitch is that it's structuring the points to be more generous toward ordinary home-owning expenses. It plans to offer one point for each dollar when used to make the mortgage payment, 2x for gas and groceries, 3x for the home services category.

Similar to American Express’ rewards program, points can then be redeemed in a variety of ways, including cash back, gifts, travel booked through its travel portal, or to offset monthly mortgage payments.

In addition, Mesa says that it will eventually offer benefits to cardholders such as discounts to home improvement merchants on its network, or discounts to other items prized by the homeowner/parent set such as memberships to warehouse wholesalers like Costco.

“Homeowners will get access to premium benefits, including big box memberships, credits towards home maintenance,” Halpin says.

Mesa is bucking the trend of tackling the home mortgage market after this fintech sector got crushed by high interest rates. While Mesa was in the works before the Feds cut rates last week, venture investing into such fintechs has been hovering at its lowest levels in six years, according to Crunchbase data.

By going for loan origination and credit cards, Mesa is hedging its bets. It will make money from a mix of interchange fees, interest revenue, and affiliate revenue. For the mortgage product, it will generate revenue from lead generation to its financial partners.

Still, it’s been a slow launch. Mesa would not share any user or revenue numbers, with Halpin saying its been operating on an “invite-only waitlist.” Now that it’s out of stealth, it plans to slowly alert people on its waitlist.

While one could argue that the market isn’t hurting for credit card options or mortgage referral services, Mesa’s founders have the kind of belief that comes from a combo of startup expertise and a fintech background. Halpin hailed from Uber during its startup years, then founded three startups and sold one (Quantivize Health) for an undisclosed sum. Co-founder Peyton Hayslette worked at a long string of fintech companies, most recently wellness credit card startup Paceline. Mesa currently employs 13 people, Halpin says. Their backgrounds include such companies as Robinhood, Block, Capital One, and American Express.

Mesa is building out its company with $7.2 million in new seed funding led by Streamlined Ventures with participation from Starting Line, Assurant Ventures, Vera Equity, and others. It has also received $2 million in venture debt from Silicon Valley Bank.