NEW YORK, Oct 25 (Reuters)–Mortgage lenders in Europe and United States will double their spending on Internet-related technology over the next five years as more consumers turn to the Web to finance their home purchases, consulting firm TowerGroup forecast on Wednesday.

U.S. lenders will spend $502 million in 2005 on mortgage-related Internet technology while European lenders will spend $301 million that year, the Needham, Mass.-based firm predicted.

This year, the firm saw U.S. lenders spending $249 million and their European counterparts $158 million on the technology. That represents a 15.8 percent compound annual growth rate in the United States and a 14.2 percent rate for Europe, it said.

In a new research paper, TowerGroup found that while U.S. consumers readily surf the Internet to shop for mortgage rates and learn more about loan products, they are reluctant to actually apply for mortgages via the Web.

"The mortgage process remains a cumbersome and often daunting one for consumers," Richard Beidl, director of TowerGroup's new Global Mortgage research and advisory service said in a statement. "Even as the Internet grows as a mortgage origination channel, customer service and personal interaction will play an increasingly significant role. To meet consumer needs and expectations, mortgage lenders will need to strive for the right blend of high-tech and high-touch, integrated across all delivery channels - from bank branch and call centres to branded Web sites and remote loan officers," Beidl said.

TowerGroup said U.S. mortgages originated via the Internet would account for just over 1.4 percent of an expected $1 trillion-plus total in 2000. By 2005, Internet