HGH - Heartland Group Holdings

[thegreatestben]

Love it, would be there in a heartbeat if I could.

[LaserEyeKiwi]

New Home lone rates. Going after the big boys. https://www.nzx.com/announcements/372087

Wow - fantastic! will definitely be witching myself at my next renewal.

Heartland drops home loan rates to new lows

12/5/2021, 1:36 pm GENERALNZX/ASX release
12 May 2021

Heartland drops home loan rates to new lows: 1.85% p.a. 1-year fixed, 1.95% p.a. floating

Heartland Group Holdings Limited’s (Heartland Group) (NZX/ASX: HGH) subsidiary Heartland Bank Limited (Heartland Bank) (NZX: HBL) (together, Heartland) has disrupted the home loan market again, this time with the reduction of its 1-year fixed and floating term loan rates. This announcement comes shortly after Heartland broadened its mortgage offering with New Zealand’s lowest revolving credit facility rate.

The challenger bank now offers the following fixed and floating rates, which are each the lowest of their category:

1.85% p.a. 1-year fixed
2.35% p.a. 2-year fixed
2.45% p.a. 3-year fixed
1.95% p.a. floating term loan
2.35% p.a. floating revolving credit

In the quarter ended 31 March 2021, the fintech lender saw a 173% increase in average monthly drawdowns compared with the previous quarter ended 31 December 2020, and has received over 6,600 applications since re-entering the residential mortgage market in October 2020.

Heartland’s online process allows for a faster home loan approval than the traditional process with other lenders. Those who meet the eligibility criteria can fill out the digital application in minutes and get a decision online, with no need to make an appointment or arrange for someone to come to them.

“People shouldn’t need to pay so much for their mortgage,” explained Heartland Bank CEO Chris Flood. “Our approach to home loans is disrupting the traditional market in favour of a digital solution, one which can offer customers market-leading rates and time savings.”

Visit heartland.co.nz/home-loans to learn more about Heartland’s eligibility criteria.
Heartland Bank lending criteria, terms and conditions apply.

– ENDS –

[winner69]

The FINTECH lender

Like it

Wonder how the vehicle part demerger progressing

[Beagle]

Not sure what lending at this rate does to their net interest margin...but everyone else seems happy about it so lets all have a group hug, lay around and be happy https://www.bing.com/images/search?v...26pid%3DImgRaw

[LaserEyeKiwi]

Not sure what lending at this rate does to their net interest margin...but everyone else seems happy about it so lets all have a group hug, lay around and be happy https://www.bing.com/images/search?v...26pid%3DImgRaw

I think this is more of a marketshare grab Beagle.

There is usually a lot of friction involved in changing mortgage providers, so most do not do it for a small 0.1 or 0.2 difference in mortgage rate. However HGH is now 0.5 cheaper than the major banks on fixed rates, and a whopping 2.5 cheaper on floating rates!, and I think that sort of gap will shift a lot of people.

I really think this is a massive growth business for HGH - and it won't be too long before they have a mortgage book over $1 Billion.

[Biscuit]

..... it won't be too long before they have a mortgage book over $1 Billion.

...paying them peanuts? and if there is a significant fall in property prices....?

[LaserEyeKiwi]

Some positive coverage https://www.interest.co.nz/personal-...one-year-fixed

As the winter real estate season approached and housing market activity starts to fall away, one bank is making a big play for the remaining home loans business.

Heartland Bank has cut its already low rates sharply.

It's core one-year fixed rate has been sliced to 1.85%, a -14 bps drop from what was already the lowest rate in the bank mortgage market.

And it has cut its already low 2.50% floating rate to 1.95%, a major -55 bps reduction.

Further it has cut -40 bps from its revolving credit rate, taking it down to 2.35%.

These are eye-catching changes.

That one year fixed rate is a full -40 bps lower than any of the major banks. It is also -34 bps lower than any other bank's one year 'special', and -24 bps below the Cooperative Bank's one year FHB 'special'.

It is easily the lowest one year rate from any institution, ever.

Heartland's 1.95% floating rate is also a market low, far lower than the 3.40% from Kiwibank, or the 2.25% on offer from KiwiSaver provider Simplicity for their members.

[LaserEyeKiwi]

...paying them peanuts? and if there is a significant fall in property prices....?

Once it has built a large book, it takes advantage of the high friction of changing and can slowly raise rates (while still being significantly lower than competitors due to its low cost model)

[Beagle]

I think this is more of a marketshare grab Beagle.

There is usually a lot of friction involved in changing mortgage providers, so most do not do it for a small 0.1 or 0.2 difference in mortgage rate. However HGH is now 0.5 cheaper than the major banks on fixed rates, and a whopping 2.5 cheaper on floating rates!, and I think that sort of gap will shift a lot of people.

I really think this is a massive growth business for HGH - and it won't be too long before they have a mortgage book over $1 Billion.

I liked this bit "One rate Heartland has not trimmed is its reverse mortgage rate which remains at 5.95% pa".

[winner69]

All part of the strategy of promoting themselves to the finance world as a FINTECH company ...rather than a finance company (and pretend bank)

FINTECHs rewarded with higher market multiples they say.