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Heartland eyes relaunch of digital home loan

Heartland says its 2.95% digital mortgage product was a hit with borrowers, and could the relaunch online offering when the lending market settles down.

Wednesday, July 15th 2020, 11:46AM

In March, Heartland launched an online-only 2.95% home loan, significantly undercutting bank rivals at the time. The loan book reached the bank's $50 million cap within a month, before the Covid-19 crisis hit. 

Chris Flood, chief executive of Heartland Bank, told TMM Online that the home loan offering "surpassed expectations", saying the lender "learned some interesting lessons" during the trial. 

"We're still attracted to the proposition and when the time's right, you'll see Heartland back in that market," Flood said. "It will still be very much as it was in the trial parameters, focused on the main centres."

Heartland is holding off for now as the interest rate market remains volatile following Covid-19. 

"The key for us is giving the market time. Once the market has settled, we will have a look at whether to do it again."

Heartland's 2.95% was one of the first sub-3% rates in New Zealand, and Flood believes Heartland can challenge the banks once again when it returns to market. 

"We want to see where the market bottoms out," Flood said. "The opportunity isn't there for us at the minute, as the banks might be able to easily match us."

Flood says Heartland is fine-tuning its online systems to improve its online model before the product potentially returns to market.

The lender will not need additional funding to restart its digital mortgage book, Flood added.

"The bank is perfectly capable of running this with the existing funding regime," he said. "If it becomes a permanent fixture, there are [funding] opportunities outside of the bank," he said. 

Tags: digital lending Heartland home loans Lending mortgages

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 ▼2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 ▼3.15 3.29 ▼3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 5.50 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.55 2.65 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac ▼3.39 3.45 ▼2.99 ▼3.35
SBS Bank 4.54 3.09 3.19 3.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 2.59 2.69 2.99
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.99
The Co-operative Bank - Standard 4.40 3.05 3.19 3.49
TSB Bank 5.34 3.35 3.49 3.79
TSB Special 4.54 2.55 2.69 2.99
Wairarapa Building Society 4.99 3.65 3.69 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.12 3.19 3.17

Last updated: 4 August 2020 11:33am

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