The Reserve Bank’s loan-to-value ratio lending restrictions meant that funding for Kiwis wishing to buy a home, if they had less than a 20% deposit, was severely restricted.

As the Home Loan market went through a period of significant contraction in New Zealand (-10% YOY), competition heated up as banks looked to secure and grow their slice of a decreasing pie. A growing trend of offering ever-increasing incentives also meant that lenders were beginning to discount heavily and not focusing on creating longer-term benefits for customers.

Innovation was needed!

So, in a world first, HomeAdvantage from BNZ gave homeowners a credit card at a home loan interest rate. Any interest they incurred on their credit card will be closer to 6% rather than 20% for the life of their home loan. For many, this could offer a significant financial benefit for up to 30 years.

This turned a perceived negative (extending credit) into a positive and transformed a credit card into a home loan product.

As a result, millions in additional business was generated, an impressive ROI was achieved and y.o.y. retention of BNZ Credit Card and Home Loan customers improved dramatically.

Most importantly it is giving BNZ the differentiation it badly needs in one of the tightest home lending markets in recent memory.