Discovery Bank earlier this week announced that it would be entering the home loan service industry. But there’s an interesting twist.
The bank said in a statement that, through its banking model “Discovery Bank will give clients up to 1.5% off their home loan interest rate for engaging and managing their money well”.
WHAT DOES THIS MEAN?
That means borrowers with home loans valued at R2 million, could save up to R400,000 in interest over a 20-year term should clients make use of Discovery Bank’s other financial services products like the lender’s Home Loan Protector and Home Insurance products.
The product essentially incentivises clients to conduct most, if not all, of their business with Discovery Bank. Other incentives to entice clients away from their current financial institutions include alternative power solutions and access to credit.
COMPETITION IS BETTER FOR CONSUMERS
bond originator, BetterBond said that it supports any financial product that will help more South Africans buy a home of their own.
“Ultimately, the consumer will benefit from a wider choice of home loan options, and BetterBond hopes to partner with Discovery in the future to make homeownership possible for even more South Africans,” Bradd Bendall, head of sales at BetterBond said in a statement to IOL NEWS.
“An increasingly competitive banking landscape means more opportunity for consumers to benefit from specialised credit offerings,” he added.
Last week Discovery CEO Adrian Gore said that the bank continued with “good progress across all metrics” after the acquisition of clients accelerated over the year to June 30 by 49% to 700,000, while the number of accounts measured 1.6 million.
Discovery had 141,600 clients in 2019.
Gore said that the bank aimed to reach operational break-even in the 2024 financial year.
IOL NEWS has reached out to Discovery to see how and what moving your bond would entail and save you each month. The company noted that the bond product has yet to be launched and would advise on these issues and steps as soon as the home loan facility is out to market
This is a developing story...