Fixed rates 'lowest in NZ', but big picture necessary, says adviser
Heartland Bank has been recognised by financial comparison website Canstar as providing outstanding value to residential home loan customers.
The non-major bank was one of two winners of the Outstanding Value Home Lender Award for the Canstar Residential Home Lender category, along with TSB.
Canstar conducted a price and features assessment across Heartland Bank’s floating, fixed and line of credit home loan offerings, which resulted in three 5-star “outstanding” ratings.
The ratings from each product under these profiles were evaluated to determine the lenders considered to provide outstanding value to consumers.
Heartland Bank general manager consumer Darryl Harnett (pictured above centre with Jose George, left and Forbes McHardy, right ) said that the bank was “extremely proud” of the recognition.
“As a New Zealand bank providing online home loans, we pride ourselves on our ability to consistently offer Kiwis some of the lowest home loan rates available, together with a fast and simple online application process,” Harnett said.
The bank acknowledged that it currently offers “the lowest advertised fixed rates in New Zealand”, based on a comparison to those advertised by other banks for the same lending criteria on April 24, 2023.
Looking at Monday figures, Heartland Bank offers two-year and three-year fixed home loan rates of 5.99% and 5.95%, and one-year and 18-month fixed rates of 6.14% and 6.15% with no establishment fee (subject to change).
“Heartland Bank is able to offer such competitive home loan interest rates due to its online loan application and low touch servicing model, removing the need for phone calls or having to visit a bank branch,” Harnett said.
Along with offering competitive fixed home loan rates, he said that Heartland Bank continued to improve its product offering. In 2022, the bank expanded its criteria to allow lending against terraced homes and townhouses and recently enhanced its online platform to “improve approval automation” and “reduce customer friction”.
Amid increases to the official cash rate, which have driven retail interest rates higher, Harnett said that Heartland Bank wanted to support new and existing customers by keeping product interest rates “as low as possible”.
“Because of this, we’re seeing significant interest in our home loans from Kiwis choosing to refinance at a lower rate than what their current provider is willing to offer them,” he said.
Kris Pedersen, managing director at Kris Pedersen Mortgages (pictured immediately below) said that while longer-term fixed mortgage rates are generally now lower than shorter-term fixed rates, it is wise to consider current market conditions before refixing for longer periods.
“Borrowers don’t want to be fixing for three to five years (especially four to five years) if there’s a chance rates might drop in 12 to 18 months’ time,” Pedersen said.
Whilst inflation remains high, latest annual inflation figures showed it has eased from 7.2% to 6.7%.
Market commentators now expect interest rates to be fairly close to the top of the hiking cycle, Westpac forecasting a further 0.25% rise to the official cash rate in May.
“Even though there might be another official cash rate increase, we’re probably not going to see much more in regard to interest rates going up (there may be minor movement in the short-term fixed rates), but we’re towards the top of the cycle,” Pedersen said.
Canstar New Zealand general manager Jose George (pictured above, left) said that Canstar research showed that Kiwis were managing their money “extremely carefully” and are “seeking value wherever they spend.”
“This is where Heartland shines. It has long been a leader in savings offers and is now – as a relatively new provider of home loans – offering excellent value for its customers,” George said.
“We are very pleased to recognise Heartland for being an Outstanding Value home loan provider.”
Heartland Bank said it was the first year that it had participated in the Canstar Residential Home lender category. From 2018 to 2022, the bank won the Canstar Bank of the Year - Savings Award.
