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Simplicity Expands In Mortgages, Offering 2.25% Floating Rate To All First Home Buyers

All first home buyers can now access a 2.25% floating home loan rate, the lowest in New Zealand, via Simplicity KiwiSaver Scheme.

The floating rate was previously only available to existing Simplicity members who had been with the provider for one year.

But given its fast growth, Simplicity is now offering the rate, with no waiting period, to every first home buyer in New Zealand who switches to its KiwiSaver scheme.

Floating rate mortgages offered by banks range from 3.4% from Kiwibank, to 4.59% from Westpac.

“Not only will first home owners pay a much lower floating mortgage rate than any bank, our KiwiSaver fees are lower too” says Simplicity Founder and Managing Director Sam Stubbs.

“Staying with a bank KiwiSaver scheme is looking sillier by the day” he said.

Mortgage lending also increases returns, giving members a 2.25% return for mortgages, instead of less than 1% at the bank.

Anyone who qualifies as a KiwiSaver first home buyer can switch to Simplicity in two minutes, and apply for a first home loan, subject to lending criteria.

Mr Stubbs was scathing of current bank mortgage rates, saying they were far too high.

“The banks know that a low floating rate mortgage, with no break fee, is the fastest way to pay off a home. Yet most still charge floating rates of over 4%” he said.

“It keeps borrowers locked into fixed rates, so they can’t pay off their mortgage as fast as possible. That’s just wrong” he said.

Simplicity launched its home loan programme by ballot in 2019.

Mr Stubbs challenged the banks to match their rate, given their huge scale. “I’m not holding my breath on the banks dropping their rates. They are more worried about their profits” he said.

Simplicity is a nonprofit disruptor in New Zealand’s financial services industry, determined to make a positive difference in the financial lives of hard working Kiwis. Started four years ago, it now has over 60,000 members and almost $3 billion of funds under management.

Simplicity was recently awarded KiwiSaver Fund Manager of the Year by Morningstar, and Consumer NZ’s ‘People’s Choice’ award for KiwiSaver.

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