The KiwiSaver and investment specialist has cut 30 basis points from its old offer at 2.8%.
Simplicity managing director Sam Stubbs said banks were not doing enough to pass on cuts.
“Even in this environment, banks are still taking ordinary hard working Kiwis for a ride," Stubbs said. "We can do better than that, so that’s what we’re doing."
“Our new floating rate is at least 1.5% lower than the banks, and the lowest rate anywhere," he added. It saves someone with a $500,000 mortgage from $30-100 a week in interest, which adds up to thousands over the years."
The offer is only available to Simplicity members. The firm will not charge borrowers for early repayments.
"We want them to get out of debt as fast as possible, not tie them down for maximum financial as the banks currently do,” Stubbs added.
Simplicity will lend up to 80% LVR, but repayments must not be more than 30% of after-tax income. The firm said its criteria was stricter than the banks as it lent money with KiwiSaver funds.
The investment firm launched its home loan offering in October, and provides loans through a ballot system. More than 180 names have been drawn so far, with $30m of pre-approvals issued.