Better Home & Finance reported a sharp increase in first-quarter loan volume, showing how AI-led mortgage platforms are trying to gain ground in a housing finance market that remains difficult for both lenders and borrowers.
The company reported loan volume of approximately $1.64 billion in the first quarter of 2026, up 89% year over year from $868 million in Q1 2025. That result also exceeded Better’s earlier guidance range of $1.40 billion to $1.55 billion.
For FinanceInsyte readers, the main story is not only that Better grew loan volume. The bigger point is that its AI platform, Tinman, is becoming a larger part of the company’s origination model. Better said platform loan volume reached $821 million, up 404% year over year, and represented 50% of total loan volume in Q1 2026.
That matters because mortgage lending is traditionally expensive, slow and operationally heavy. If AI-native platforms can reduce processing time, lower customer acquisition pressure and improve workflow efficiency, they could change how digital mortgage lenders compete with banks, brokers and non-bank lenders.
Revenue improved, but losses remain part of the story
Better reported total net revenues from continuing operations of approximately $48 million, up 52% year over year from $31 million in Q1 2025. The company also said it funded 5,018 total loans, compared with 2,975 a year earlier, representing 69% growth.
The revenue growth is a positive signal, especially in a lending environment where interest-rate pressure continues to affect borrower demand. But Better is still operating at a loss. The company reported a net loss of $70 million, compared with a net loss of $51 million in Q1 2025.
On an adjusted basis, the trend looked better. Better’s adjusted EBITDA loss improved to $19 million, compared with a loss of $36 million in Q1 2025. That represents a 48% year-over-year improvement.
This is the key balance in Better’s results: growth is accelerating, but the company still needs to prove that its AI-based operating model can translate into sustainable profitability.
Refinance and HELOC demand drove growth
By product, refinance volume was the largest contributor in the quarter. Better reported $854 million in refinance loan volume, representing 52% of total loan volume. Purchase loan volume was $588 million, or 36%, while HELOC loan volume reached $203 million, or 12%.
The strongest year-over-year growth came from refinance activity, which increased 542%. HELOC volume grew 30%, while purchase loan volume increased 2%.
This mix tells an important story. Mortgage lenders are not only competing for home purchase borrowers. They are also trying to build broader consumer finance relationships through refinancing, home equity products and platform-based distribution.
Better has been moving in that direction. In April, the company announced a Better Home Equity Card powered by Stripe, designed to give customers debit-card access to funds drawn from a Better HELOC. The company positioned the product as a modern access layer for the home equity market.
For personal finance and fintech markets, this is a meaningful shift. Home equity is no longer being treated only as a traditional lending product. It is increasingly being packaged as a digital finance experience, connected to cards, payments, account access and embedded financial infrastructure.
The platform channel is becoming more important
Better’s loan volume was almost evenly split between channels. The company reported platform loan volume of $821 million, or 50% of total loan volume, and direct-to-consumer loan volume of $824 million, also around 50%.
This is important because platform-based lending can reduce dependence on expensive direct marketing. If partnerships and embedded channels bring borrowers into the system more efficiently, Better may be able to scale loan volume without adding the same level of customer acquisition cost that traditional D2C lenders often face.
The company ended Q1 2026 with approximately $136 million of cash and cash equivalents, restricted cash and net assets held for sale. Since the start of the quarter, Better also announced several strategic actions, including a $69 million underwritten public offering, $25 million in planned annualized cost reductions, increased warehouse capacity to $850 million, and an active sale process for its U.K.-based bank.
Those actions show that Better is trying to support growth while also tightening its cost base and improving financial flexibility.
Q2 guidance points to continued volume
For the second quarter of 2026, Better guided for loan volume of $1.575 billion to $1.725 billion, total net revenues of $53.0 million to $56.0 million, and an adjusted EBITDA loss of $12.5 million to $14.0 million.
The guidance suggests the company expects loan volume to remain around Q1 levels, while revenue is expected to improve sequentially. That could reflect product mix, pricing, platform contribution or higher-margin lending activity such as HELOCs.
For investors, the next major question is whether Better can continue narrowing adjusted EBITDA losses while maintaining platform growth. For the broader finance market, the question is whether AI-native mortgage models can scale through rate cycles instead of depending only on favorable refinancing conditions.
Why this matters
Better’s Q1 results show that AI in finance is becoming more practical and operational. In mortgage lending, the value of AI is not just in customer-facing automation. It is in faster underwriting workflows, lower friction during loan application, better document handling, improved borrower communication and more efficient platform distribution.
The company’s growth also reflects a larger trend: consumer finance is becoming more embedded, more digital and more platform-driven. Mortgage, refinance and home equity products are being connected with payments, cards, AI agents and partner ecosystems.
Better still has clear challenges. Net losses remain significant, the mortgage market remains rate-sensitive, and the company must prove that its AI-led model can create durable profitability. But Q1 2026 shows meaningful progress in loan volume, platform adoption and adjusted EBITDA improvement.
For FinanceInsyte, the key takeaway is simple: Better is trying to turn mortgage lending from a transaction-heavy business into an AI-powered financial platform. The results show early momentum, but the next test will be whether that momentum can continue while losses narrow.
Source link : Businesswire
