The challenger bank has reduced its direct-to-customer online mortgage to 1.85% for one year, has cut floating rates to 1.95%, and slashed its revolving credit loan to 2.35%.
Each are the lowest on offer in New Zealand, with the one year fixed mortgage the lowest rate on record.
The one year rate is comfortably cheaper than The Co-operative Bank's 2.09% rate. The big banks all offer 2.25% home loans on one year terms.
The floating rate is also well ahead of rival offerings. KiwiSaver provider Simplicity offers a 2.25% mortgage rate to members buying their first home, but the cheapest non-bank rate in the market behind Heartland is Resimac's 3.39% variable loan.
Heartland re-entered the mortgage sector with its online offering in October last year.
The aggressive set of rate cuts is likely to trigger more competition among the banks, amid downward pressure on short-term home loans.
Helped by a strong marketing campaign, Heartland's loan offering has been successful. It has seen a 173% increase in monthly drawdowns since December.
The bank said its online distribution platform enabled lower interest rates and faster processing.
The online offering marks a new challenge for the big banks, which are reliant on old legacy systems and suffering from extended turnaround times.
Heartland said its "self-serve home loan application is designed to reduce the friction often associated with interacting with a bank".
Chief executive Chris Flood said: "People shouldn’t need to pay so much for their mortgage. Our approach to home loans is disrupting the traditional market in favour of a digital solution, one which can offer customers market-leading rates and time savings."
Heartland's online loans are not available through brokers.
Borrowers must be refinancing or buying a home to live in, and have a 20% deposit, on a single section in a New Zealand urban centre.
