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Heartland launches 1.85% mortgage

Heartland Bank has slashed its one year fixed mortgage and sharpened its floating rates as the lender puts more pressure on the big four.

Wednesday, May 12th 2021, 2:31PM 1 Comment

The challenger bank has reduced its direct-to-customer online mortgage to 1.85% for one year, has cut floating rates to 1.95%, and slashed its revolving credit loan to 2.35%.

Each are the lowest on offer in New Zealand, with the one year fixed mortgage the lowest rate on record.

The one year rate is comfortably cheaper than The Co-operative Bank's 2.09% rate. The big banks all offer 2.25% home loans on one year terms. 

The floating rate is also well ahead of rival offerings. KiwiSaver provider Simplicity offers a 2.25% mortgage rate to members buying their first home, but the cheapest non-bank rate in the market behind Heartland is Resimac's 3.39% variable loan. 

Heartland re-entered the mortgage sector with its online offering in October last year. 

The aggressive set of rate cuts is likely to trigger more competition among the banks, amid downward pressure on short-term home loans. 

Helped by a strong marketing campaign, Heartland's loan offering has been successful. It has seen a 173% increase in monthly drawdowns since December. 

The bank said its online distribution platform enabled lower interest rates and faster processing. 

The online offering marks a new challenge for the big banks, which are reliant on old legacy systems and suffering from extended turnaround times.

Heartland said its "self-serve home loan application is designed to reduce the friction often associated with interacting with a bank".

Chief executive Chris Flood said: "People shouldn’t need to pay so much for their mortgage. Our approach to home loans is disrupting the traditional market in favour of a digital solution, one which can offer customers market-leading rates and time savings."

Heartland's online loans are not available through brokers. 

Borrowers must be refinancing or buying a home to live in, and have a 20% deposit, on a single section in a New Zealand urban centre.

Tags: Heartland Lending Mortgage Rates

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Comments from our readers

On 14 May 2021 at 10:37 am Straight shooter said:
good on Heartland, but it raises the question if the banks are all being provided funds at a cost of 0.25% why have they not lowered their floating rates? the big four are all sitting with carded rates above 4%, this is just plain profiteering! oh and what about credit card and overdraft rates? these have not moved at all, no wonder we are seeing record profits again, watch the big four will send over $4 billion back across the Tasman this year. And the Government and Com Com sit back with their masks covering their Mouths, noses and eyes it seems.

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.19 2.59 2.99
ANZ 4.44 2.79 3.19 3.59
ANZ Special - 2.19 2.59 2.99
ASB Back My Build 1.79 - - -
ASB Bank 4.45 2.19 2.59 2.99
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - ▼2.19 2.55 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 ▼2.79 3.15 3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 1.95 1.85 2.35 2.45
Heretaunga Building Society 4.99 3.80 3.90 -
HSBC Premier 4.49 2.19 2.45 2.69
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 2.25 2.35 2.65
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.40 3.04 3.40 3.84
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.19 2.55 2.99
Liberty 5.69 - - -
Nelson Building Society 4.95 3.20 3.24 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 2.69 2.99 3.29
SBS Bank Special - 2.19 2.49 2.79
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - ▼1.99 - -
The Co-operative Bank - Owner Occ 4.40 ▼2.19 2.59 ▲2.99
The Co-operative Bank - Standard 4.40 ▼2.69 3.09 ▲3.49
TSB Bank 5.34 2.99 3.35 3.79
TSB Special 4.54 2.19 2.55 2.99
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 ▼2.79 3.19 3.59
Lender Flt 1yr 2yr 3yr
Westpac - Offset 4.59 - - -
Westpac Special - ▼2.19 2.59 2.99
Median 4.55 2.68 2.99 2.99

Last updated: 21 June 2021 8:52am

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