Discovery Bank shaking the foundations of the home loan sector by offering cheaper rates
The bank says it could cut rates by up to a further 1%, if clients were showing to take care of their finances.
Discovery Group offices in Sandton. Image: Abigail Javier, Eyewitness News
Bruce Whitfield speaks to Hylton Kallner, CEO of Discovery Bank.
Discovery Bank is surely feeling that there's room for at least one more player in the home loans market, as the bank enters the home loans space by promising to make them cheaper with lower rates.
But of course, as all of these things happen, T's and C's most certainly do apply.
Discovery Bank will offer personalised interest on home loans, saying it could cut rates by up to a further 1%, if clients were showing to take care of their financial well-being.
Through Discovery's 'behavioral banking' model, clients could be rewarded for managing their money well, such as saving or investing for retirement.
This could see clients having their home loan interest rates decreased by up to 1%.
Speaking to Bruce Whitfield on The Money Show, Hylton Kallner, CEO of Discovery Bank says they have good analytics on client patterns and habits and who will likely take up the offer on a home loan.
"From a banking perspective, the entire model has been one of shared value. Understanding the client, understanding their financial behaviours. Giving them incentives and a road map to make themselves financially healthier."
- Hylton Kallner, CEO - Discovery Bank
"...to reward them with things like higher interest rates on savings and lower interest on borrowing and debt, and home loans follows a very similar pattern. If your manage your money well, you're a lower risk to the bank."
- Hylton Kallner, CEO - Discovery Bank
"If you're managing your money well and you're protecting your home, then we can take your contracted rate and bring it down by up to a further 1%."
- Hylton Kallner, CEO - Discovery Bank
Scroll to the top to listen to the full interview.