TSB Bank: Low interest rate an opportunity to fix

Each year CANSTAR researches and rates a large selection of home loan products on the New Zealand market. This year we have analysed 56 from 10 financial institutions to determine which products offer outstanding value for home buyers across both fixed and floating rates, and residential and investment purposes.

Independent and New Zealand owned TSB Bank has scored a five star rating in several categories and we caught up with TSB’s Manager, Lending and Products, Phil Gerrard, for a quick Q&A on a new and somewhat ground breaking loan product recently introduced: TSB’s 10 year fixed-term home loan.

Q: A 10 year fixed-term loan at a very competitive rate: Where did the idea come from?

A: Longer term loans are quite common overseas. The low interest rate environment – and the limited scope for further rate reductions – provided an opportunity for borrowers to fix long term and to manage their finances with a great deal more certainty.

 

The offer was seen as somewhat ground-breaking and it certainly seemed to prompt competitor banks to review their lending term mix

 

Q: How did you determine what features would be included in the loan?

A: We researched consumer needs and expectation, including the 10 year proposition specifically. The response was very encouraging, with people citing the certainty around repayments and loan portability as particularly appealing features

 

Q: Are there broad groups of customers who would potentially be suited to this product?

A: Given the repayment certainly it provided, the offer has resonated with a customer groups ranging from first home and rental investment buyers to those borrowers with a longer loan repayment horizon. We’ve been very pleased with customer interest in the offer – and the loan uptake experienced.

 

TSB’s 10 year fixed home loan is available for between $250,000 and $2 million (subject to LVR and affordability restrictions) and is portable in the event of a change of property.

 

Read CANSTAR’s Home Loans Star Ratings report for details of other five star home loan products providers.

 

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