Home build rate of 1.79%

AUCKLAND: ASB is to use cheap funding from the Reserve Bank to offer a cutprice mortgage to home builders.

The 1.79% rate is available to those who build a new home from scratch or buy a home and land package.

The rate is substantially lower than the oneyear fixed terms at the other major banks which sit around 2.25% although Heartland Bank last week announced a 1.85% rate fixed for one year and a 1.95% variable rate.

Craig Sims, ASB executive general manager of retail banking, said its ASB Back My Build rate used funds available under the RBNZ’s funding for lending programme.

The programme was launched last year with the aim of keeping mortgage rates low to help stimulate the economy.

Mr Sims said it hoped the rate would result in ASB doing about a thousand additional newbuild home loans in the next year.

‘‘Housing supply is a huge issue for the New Zealand economy. That is why we’re keen to give a legup to customers who want to join us in being part of the solution.

‘‘We’ve deliberately chosen to make the offer available to both owneroccupiers and investors in recognition of the role investors can play in making new, highquality homes available for Kiwi families.’’

On top of the low rate, borrowers will also receive $2000 cash back if they incorporate green design into their build and can show they intend to build a sixstar Homestar rated home or higher.

‘‘A more sustainable housing market is about increasing housing supply, but it is also about creating more energyefficient healthy homes.’’

Mr Sims said the variable rate would be available for up to three years from when the borrower first drew down their newbuild loan. —