Kiwibank promotes offsets
Kiwibank has changed its "headline home loan" to an offset product and cut the interest rate.
Thursday, July 25th 2013, 11:00PM
It had previously done most of its marketing around special, fixed-term rates.
But chief executive Paul Brock said that because interest rates were low across the board, the bank wanted to focus on ways that it could help borrowers pay down their loans more quickly.
The offset product allows customers to use their savings, and those of other family members, to offset the total balance of the loan.
Brock said: “The offset product enables customers to significantly reduce the amount of the loan incurring interest charges. We calculate savings over the term of a loan of $30,000 to $40,000, and much shorter repayment periods.”
He said it would allow parents to help by letting their savings be used to reduce the amount of interest charged.
The interest rate has been cut from 5.5% to 5.25%. It is available from tomorrow for new customers and in about a week for existing Kiwibank customers
| « Interest rates: A game of two halves | Westpac third to market with offset loan » |
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