Heartland launches cut-price revolving credit product

The rate is 70 basis points cheaper than the next RCF, offered by Kiwibank at 3.45%, and 1.8% cheaper than the lowest-rate RCF offered by the big four. 

The new RCF underlines the sharp contrast between the big banks and their smaller rivals on floating rates and RCFs over the past year. 

Heartland's new product will be distributed through the digital channel, like its one year 1.99% fixed home loan. Borrowers can apply and receive approval online without the need for a broker or an appointment.

"Digitalisation means a low cost of onboarding, which can be passed on to the customer through low rates," said Heartland Group chief executive Jeff Greenslade.

"It also means speed – an answer can be given in minutes, so customers don’t have to endure lengthy processes."

Greenslade added: "Heartland is offering a solution to meet increasing digital demand, which then allows us to help our customers save on their mortgage repayments."

The bank will only charge interest on money drawn down, and will not charge monthly fees. 

The offer comes with strict eligibility criteria.

Clients must be refinancing or purchasing a standalone house on a single section in an "urban New Zealand centre", must have a deposit of at least 20%, and must intend to live in their home.