SBS Bank has launched a special 3.99 percent home loan rate for first-home buyers, a move mortgage expert is calling “cashback on steroids," RNZ has reported.
The limited-time offer undercuts the bank’s standard one-year fixed rate of 4.79 percent, which is like the rates offered by New Zealand’s big four banks. Along with the lower rate, SBS is also contributing towards insurance costs for first-home buyers, providing added relief at a time when affordability remains a challenge.
SBS chief executive Mark McLean said the bank supported 1,479 first-home buyers last year, saving them about $156 a fortnight compared with larger banks. “We’re proud to help first-home buyers get a step closer to owning their own homes,” he said.
Industry experts say banks are competing fiercely for first-home buyers, often through creative incentives. David Cunningham, chief executive of Squirrel, noted that the Co-Operative Bank is currently offering up to 1 percent cashback, capped at $15,000.
“Banks want to lock in long-term relationships with first-home buyers. They’re not necessarily making big profits upfront — it’s more about getting customers through the door,” Cunningham explained. “You might not see another bank match 3.99 percent, but you could see bigger cashback offers or other incentives.”
Mortgage adviser Glen McLeod of Link Advisory added that SBS has a history of launching short-term, eye-catching deals. “It’s their hook — a way of giving people an entry point into the market. If it helps buyers save money, you can’t really argue with it,” he said.
The move highlights how smaller banks are using sharp rates and extras to stand out in a crowded market, while giving first-home buyers much-needed breathing room as they take their first steps onto the property ladder.