ASB Bank made a splash recently with the launch of their special mortgage rate for customers that are buying new builds or building their new home or investment property.
The initiative called Back my Build has a floating rate of 1.79% which is the lowest on the market, all in the name of encouraging buyers to buy new and help tackle the housing supply issues we have in New Zealand. Here’s what you need to know.
First home buyers, next home buyers and investors are all eligible for the rate if they’re buying a new build or house and land package. ASB claims that Property investors have been intentionally included as a way of helping them provide quality new homes to renters around the country.
Because the offer is all about boosting the construction of brand new homes, existing loans for new builds can’t be switched over to the Back my Build rate after having drawn down elsewhere.
ASB has also partnered up with the New Zealand Green Building Council. To encourage green and sustainable building, customers who are working through the Homestar process and get a Homestar rating of 6 or higher are eligible for a $2,000 cash contribution.
Like with any bank cash contribution, the cash can be clawed back if the customer switches their loan from ASB to another lender or sells within three years. If they repay the loan within that timeframe, there will be a pro-rata approach where the amount that gets clawed back is based on how many months remain.
All in all, we think this is a pretty good initiative. It should help lighten the load for our first home buyers going through the building process, with the interest rate keeping their payments as low as possible while they continue to rent during the build.
It’s good news for investors too, with the opportunity to access such a low rate while buying a new build with 20%, as opposed to their 30% deposit requirement for existing properties.
Have a chat with one of our advisers to see if ASB's Back my Build is right for you.