Simplicity has raised its game by providing all first-home buyers access to its 2.25% floating home loan rate, the lowest in the New Zealand market.
The floating rate was only available to existing Simplicity members who had been with the provider for a year. Now, however, the lender is offering the rate, without a waiting period, to all first-home buyers who switched to its KiwiSaver scheme.
“Not only will first home owners pay a much lower floating mortgage rate than any bank, our KiwiSaver fees are lower too,” said Simplicity founder and managing director Sam Stubbs. “Staying with a bank KiwiSaver scheme is looking sillier by the day.”
Banks’ floating rate mortgages in New Zealand range from 3.4% from Kiwibank, to 4.59% from Westpac – which Stubbs said were far too high.
“The banks know that a low floating rate mortgage, with no break fee, is the fastest way to pay off a home. Yet most still charge floating rates of over 4%,” Stubbs added. “It keeps borrowers locked into fixed rates, so they can’t pay off their mortgage as fast as possible. That’s just wrong.”
Stubbs is calling on banks to match Simplicity’s rate, given their huge scale.
“I’m not holding my breath on the banks dropping their rates. They are more worried about their profits,” he said.