It says its digital platform will allow rates to stay low
Reverse mortgage specialist Heartland Bank is taking on the main banks in the mortgage space and has launched series of new home loan rates, starting from a one-year fixed rate of 2.89%.
Its two-year fixed rate is 2.97%, and it is also offering a three year fixed rate of 3.39%. The closest main bank competition is currently ASB’s ‘special’ one year rate of 3.39%.
Heartland’s products have no set-up fees, and require a minimum 20% deposit or the ownership of a home with at least 20% equity. The home needs to be a standalone house that is a freehold, cross lease or on a unit title in the areas of Auckland, Hamilton, Tauranga, Napier, Hastings, Kapiti Coast, Wellington, Nelson, Christchurch or Dunedin.
Heartland chief executive Jeff Greenslade said the offer is limited during the product’s trial phase, and that Heartland is trying to “test the appeal” of conducting the loan process entirely through a digital platform.
“Customers are increasingly opting to transact online, and via their phones, across a range of industries,” Greenslade told Stuff. "We're testing whether that applies to home loans."
Greenslade says that the rates create relatively low margins, but if the product takes off, Heartland will offer wholesale loans to create a better return for its business. If it did decide to take the product off the market, existing loans would still be honoured and would become liquidity assets for the bank.
Greenslade also noted that the digital platform would reduce costs, and would allow its home loan rates to stay very competitive.
Heartland already offers unsecured business loans of up to $100,000 to small-to-medium businesses across New Zealand.
