Heartland goes direct to customers with 2.89% mortgage

Heartland Group has launched a direct-to-consumer digital mortgage with a one year rate of just 2.89%, as it takes on the established banks.

The group launched its new product this week, with two year rates of 2.97%, and three year rates of 3.39%. The rates are the cheapest on offer in the market, ahead of Simplicity's 2.95% mortgage.

The new product will not be available through the adviser channel, as Heartland explores direct digital customers, through mobile and desktop online. 

Heartland chief executive Jeff Greenslade told TMM Online the new mortgages were a "trial", but the bank would put financing in place to extend the offering if it proves popular. 

"We're going to see if the rate is of interest to customers, and take stock," he said. "Once we hit our pilot limit, we will weigh up different factors, and if it's successful, will set up funding in the group structure to support it," he said. 

The product is the most aggressive move yet by a non-bank to take prime mortgage customers. Simplicity's 2.95% mortgage, available to KiwiSaver customers, was launched back in October. 

To qualify for Heartland's record low rates, customers need a 20% deposit, and must be owner-occupiers. The bank will lend on standalone properties in Auckland, Hamilton, Tauranga, Napier, Hastings, Kapiti Coast, Wellington, Nelson, Christchurch, Queenstown or Dunedin.

Greenslade told TMM Online Heartland was testing the appetite for digital mortgage products. 

"People say they like doing things on their mobile, so we're seeing if there's any truth in it."

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