PHOTO: SBS Bank
SBS Bank, one of New Zealand’s smallest financial institutions, is offering a competitive interest rate for first-home buyers. The bank’s one-year home loan rate is set at 6.14 percent, a figure likely to attract attention from Kiwis seeking deals amid soaring living costs and high interest rates.
However, experts believe that major banks will not rush to match this rate, even though it is 100 basis points lower than what others are offering. This hesitation is due to certain conditions attached to SBS’s offer.
The 6.14 percent rate is available only to those who can secure a 20 percent deposit or who are buying through Kainga Ora’s First Home Loan scheme, which underwrites the loan and requires just a 5 percent deposit. Additionally, the maximum cashback offered is $4000, provided the borrower also transfers their KiwiSaver.
Meanwhile, larger banks have been adjusting their rates. ASB, one of New Zealand’s largest lenders, recently joined BNZ and Kiwibank in lowering its home loan rates. ASB had already reduced rates for six-month, one-year, and four-year terms last week.
These rate adjustments come as the Reserve Bank is anticipated to maintain its official cash rate at 5.5 percent next week, continuing nearly a year of stable monetary policy.