Bank offers 'market-leading' sub-two per cent floating rate for new builds

ASB says it hopes to boost New Zealand’s housing supply by offering a “market-leading” 1.79 per cent floating interest rate for people building a new home from scratch or buying a home and land package. 

Building (file photo). Source: Seven Sharp

The offer, which comes into effect today, is available for people who will be living in the house they build and investors who are buying a finished new build or building a new home. 

Craig Sims, the bank’s executive general manager of retail banking, said ASB aimed to issue about 1000 of the loans in the next 12 months. 

"We’re thrilled to be offering this very sharp interest rate to encourage more customers to consider new build options,” Sims said. 

“We’ve deliberately chosen to make the offer available to both owner occupiers and investors in recognition of the role investors can play in making new, high quality homes available for Kiwi families.”

Customers can get a $2000 reimbursement if they incorporate “green” solutions to their build. The house would have to meet the requirements of a 6 Homestar-rated home

Heartland Bank last year took out the crown for the country’s cheapest offering, dropping its mortgage rate to below 2 per cent. It has since dropped its floating rate to 1.95 per cent a year. 

Comparatively, the main banks of ANZ, BNZ, and Westpac all offer rates of 2.25 per cent at a one-year fixed term as their cheapest rates for home loans. 

Variable rates mean the interest on a person’s home loan can fluctuate as interest rates rise and fall.