Leading bank shaves 2.76 percent off its floating rate for customers wanting to build

ANZ is offering a discounted floating rate of 1.68 percent for new build homes.
ANZ is offering a discounted floating rate of 1.68 percent for new build homes. Photo credit: Getty Images.

A leading bank is offering the lowest mortgage rate across the market in a bid to make houses more affordable for Kiwis.

ANZ announced on Monday it's offering a floating mortgage rate of 1.68 percent for new builds, shaving 2.76 percent off its standard floating mortgage rate (currently 4.44 percent), for up to 24 months.

It undercuts ASB's Back My Build rate of 1.79 percent available for up to 36 months (three years), announced in May. It's also lower than standard floating rates available in the market, including Simplicity's 1.9 percent first home loan rate (available to Simplicity KiwiSaver members), and Heartland Bank's 1.95 percent residential floating home loan rate.

ANZ's managing director personal Ben Kelleher said homeownership is moving out of reach for many and the new rate supports supply, helping more Kiwis onto the property ladder.  

"New Zealand's fundamental problem is one of supply and demand. Making it more affordable for people to fund new builds is one way we can contribute to increasing supply in the market," Kelleher said.

The bank is also offering up to $3000 as a cash contribution for first-home buyers and to customers building a 6 plus Homestar rated home, which applies to homes that are easier to keep warm and healthy, are more cost-effective to run - and more environmentally friendly.

Unlike a fixed interest rate, ANZ's "Blueprint to Build" discounted floating rate (currently 1.68 percent) is based on the bank's standard floating rate, which can change according to market conditions.

The special is available from July 5 and applies to both new build homes (including turn-key) and builds already underway, for 24 months. It doesn't apply to renovations, sections or bare land.

ANZ also confirms there's no establishment fee and customers eligible for a cash contribution will receive it in their account when the loan is drawn down.

As ASB is forecasting interest rates to rise from May 2022, mortgage borrowers considering taking up ANZ's Blueprint to Build rate are wise to consider how interest rates are tracking and whether to lock in a fixed mortgage rate sooner if interest rates start to rise.