Equitable has entered the home loan business offering mortgages 4.95 per cent.
Group general manager Philip Markwick says Equitable will be using financial planners, adviser and brokers to distribute the product.
He says the home loans business gives intermediaries a new range of products to sell and a new income stream.
The Equitable Home Loan package has eight different options, and a combination of any four can be used in one mortgage advance.
One option is Low Start, which is being offered at a rate of 4.95 per cent for the first year of the loan. After year one it switches to the floating rate, plus a premium of 0.55 per cent.
Currently Equitable's floating rate is 5.95 per cent, the same as other small players in the mortgage market and below the 6.5 per cent charged by major banks.
Markwick says people with a $100,000 mortgage can save $1500 a year in interest by using the Low Start option as opposed to a bank loan.
Two other options are the Equity Accelerator, where one loan can be split into two accounts (eg: home and investment property). The borrower can specify repayments to one or the other account, and he Split Loan, where one loan can be split into a maximum of four loan accounts, comprising any mix of loan products.
Equitable's mortgage business is being funded through AMSNZ, a subsidiary of ABN Amro. ABN Amro are also behind the mortgage business launched, a week ago, by former Guardian Trust mortgage manager William Cairns.
Equitable has entered the home loan business offering mortgages 4.95 per cent.