Heartland Bank publishes New Zealand’s first mortgage rate below 2%

Heartland Bank has published the lowest home loan rate in New Zealand history.

The bank today announced a fixed one-year loan rate of 1.99 percent.

To be eligible for Heartland home loans, clients must refinance or purchase a detached home in a single section in a major New Zealand center, have a deposit or equity of at least 20 percent, and an intention to live at home.

In addition to this historic low rate, Heartland also offers a two-year fixed rate of 2.35% and a three-year rate of 2.45%.

With the official cash rate currently at a record low of .25 percent, banks have been increasingly lowering the rates on their home loans.

Heartland Bank CEO Jeff Greenslade credited the bank’s digital strategy.

“Digitization means a low cost of incorporation, which can be passed on to borrowers. It also means speed: a response can be delivered in minutes, so that clients do not have to endure the lengthy processes of traditional banks,” said Greenslade.

“Additionally, Heartland’s group structure provides it with extensive funding flexibility.”

Heartland says this offer will only be available for a limited time.

This will undoubtedly put additional pressure on the other banks in the country to lower their mortgage loan rates as well.

SBS bank has also increased competitive bets at a rate of 2.49 percent for 18 months, two years or three years.

The smaller banks appear to be taking the fight to the larger banks, which currently have higher interest rates.

ANZ, ASB, BNZ, Kiwibank and Westpac are currently announcing a one-year fixed rate of 2.55%.

The question now is whether any of these banks will join the competitive fight and lower their rates as well.

– More to follow