Discovery Bank today introduced its new Home Loan product, offering clients competitive, personalised interest rates based on their individual risk profiles.
Leveraging its established Shared-value Banking model, clients can reduce their interest rate by up to 1% by effectively managing their finances with Vitality Money and securing their home loan and property with Discovery’s insurance products.
Discovery Bank clients can secure a market-related rate upfront and further reduce their interest repayments over time by managing their finances wisely, resulting in long-term savings. This shared-value approach could enable the current Discovery Bank client base to save up to R2.8 billion in interest repayments on existing loans, while South Africans as a whole could save up to R12.2 billion annually with this model.
“This is a highly anticipated milestone for us as we open the virtual doors to our home loans ecosystem. Those looking to buy a new home or wanting to upgrade their home, can enjoy a full ecosystem of benefits and tailor-made services in the Discovery Bank app,” said Hylton Kallner, CEO of Discovery Bank.
“Our clients have comprehensive homeowner support alongside our home loans, with protection products for their homes and family, access to additional financing of energy solutions, and various rewards.”
Discovery Bank offers home loans up to 100% of the value of properties, with personalised interest rates over a range of repayment terms up to 30 years. In addition to financing for new home purchases, Discovery Bank clients can also switch their existing home loans, or refinance their homes with this new offer. With both switching to Discovery Bank and refinancing unbonded homes, clients can unlock equity in cash based on the value of their homes.
Home Loans meets Shared-value Banking
As clients manage their money well, they create less risk and more value for Discovery Bank. The behaviours that are rewarded, include saving, being adequately insured, investing for retirements, and paying off home loans faster. The Bank shares the value from these financial behaviours back with clients in the form of better interest rates and other rewards linked to the Vitality Money programme. The better clients manage their money, the higher their Vitality Money status and the better their rewards. Through the combination of Vitality Money, the Home Loan Protector and Building and Contents Cover, Discovery Bank home loan clients with can lower their interest rates by up to 1%.
All clients who take out new home loans, switch home loans or refinance their homes with Discovery Bank can qualify for the Shared-value Interest Rate discount.
“We feel motivated to change the landscape of homeownership. The unique nature of home loans means client and asset risk typically reduce over time. With high costs negatively impacting repricing or switching to a different bank, the result is that an estimated 60% of our clients are overpaying on their existing home loans today,” Kallner says.
“The solution is not only a once-off credit reassessment, but a client controlled dynamic interest rate that adjusts based on real-time changes in financial behaviour. With Discovery Bank home loans, clients can be certain they will get accurate risk-based interest. This ecosystem will give Discovery Bank clients a personalised home-loan preliminary offer in under 5 minutes, and a completely digital application process on our award-winning Discovery Bank app.
“Our clients will get all the support they need in the home ecosystem – all to make the process of buying and owning a home as seamless and stress-free as possible.”
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