By PAULA OLIVER
Superbank has launched a home loan service just as the housing market is starting to turn - but its ambitious boss is confident it will still win customers.
The bank arose last year from a joint venture between supermarket Foodstuffs and Australian bank St George. It began slowly with
a high-interest savings account and later a transactional account.
Now it has launched what it claims is a New Zealand first - a mortgage that has loyalty discounts on interest rates.
People who sign up for Superbank's home loan will see their interest rates reduced depending on how long they stay with the bank.
After two years the interest rate is discounted by 0.1 per cent, after four years it is reduced by another 0.05 per cent, until the maximum discount of 0.6 per cent is reached.
Superbank chief operating officer James Munro claimed it would be difficult for the banking sector's major players to compete with the offer because they would have to pass it on to all of their existing customers - at a significant cost. He said the idea had been used in Australia.
Despite signs that the red-hot housing market has turned in many centres, Munro was confident Superbank would pick up customers.
"You can always wish you launched at the start of a boom. But we aren't here for this year. We're here for the long term."
Mortgage brokers will be a strong part of the new loan offer, with Superbank having limited mobile mortgage managers and a phone and internet base.
Superbank passed through $250 million in deposits this month.
It reported an annual loss for the year to September 30 of $12.6 million, mainly due to start-up costs.
In the six months to March 31, it reported a loss of $3.7 million.
