Simplicity cuts floating rate to 1.9%

The new rate is sharply priced, though ASB's variable rate Back My Build loan is available at 1.79%.

Most bank floating rates remain above 3.4%, despite a record low official cash rate and supportive monetary policy.

Heartland offers a 1.95% variable online home loan, with the next cheapest Resimac at 3.39%.

The cheapest fixed term mortgage remains Heartland's one-year online home loan at 1.85%. 

Simplicity, a non-profit KiwiSaver provider, was recently made one of the Government's default schemes.

Its floating rate mortgages are available to members only, for first homes. Customers can apply and receive pre-approvals online.

Simplicity said its 35 basis point cut was the fifth reduction in rates since it launched its home loan offering in 2019.

“Someone has to keep the banks honest, and the current interest rate climate supports lower mortgage rates,” Sam Stubbs, co-founder of Simplicity, said.

“The main banks currently charge from 3.40% to 4.59% for a floating rate mortgage. At those rates the banks aren’t being robbed, they’re doing the robbing.

“And the banks offer cheaper fixed rates because they want borrowers to renegotiate your mortgage every year or two. That allows them to sell more high fee products like credit cards and insurance,” he added.