KeyBank is using the Internet to reach new markets for its home equity loans.

This week the KeyCorp subsidiary started offering home equity lines of credit to customers of TD Waterhouse. Applications can be made by phone or through a cobranded site that can be reached only from the brokerage’s site.

“This is an opportunity not only to expand our geographic reach but also to increase volumes generated through the Web,” said Mary Balding, vice president of the Web site management team at Key Electronic Services, which developed and maintains the site.

Until this week TD Waterhouse offered home equity lines from Mellon Bank. Mellon notified the brokerage last year that it wanted to discontinue the relationship and focus more on its high-growth, high-return businesses, said a Mellon spokesman, Ron Gruendl.

“This doesn’t fall within that category,” Mr. Gruendl said. “This has been a low-volume, low-growth service with some high administrative costs.”

TD Waterhouse is trying to build a diversified financial services platform and felt it made more sense to form a partnership than develop its own home equity products through its TD Waterhouse Bank, said public relations manager Melissa Fox.

“It’s not our area of expertise, so we decided to partner with someone who is an expert in that area,” she said.

Cleveland-based key has been pursuing similar alliances with other companies for about two years in an effort to boost assets and reach new customer segments, Ms. Balding said, but the partnership with TD Waterhouse is the most extensive to date.

TD Waterhouse, which is mostly owned by Toronto-Dominion Bank, is known mainly as an online brokerage, Ms. Balding said, and “that’s one of the reasons we think the … relationship is good for us.”

KeyBank has provided links on some companies’ Web sites and developed privately labeled applications for others. It recently struck a partnership with boats.com. The arrangement lets boat buyers access financing from vendors through boatsbank.com, a service run by KeyBank.

“The relationship with TD Waterhouse is something that we wanted to use as a demonstration of capabilities,” Ms. Balding said.

KeyBank’s own Web site has offered online applications for home equity products since 1998. Last year the $87-billion asset bank generated $10 million of home equity financing online.

That is only a fraction of what is done by the company’s brick-and-mortar business, but online volumes are continuing to increase “month after month, quarter after quarter,” Ms. Balding said.

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