No frills KiwiSaver provider Simplicity is getting into home finance offering cut price loans to its members.
It is going to offer members a floating mortgage rate of just under 3 percent from November.
Simplicity managing director Sam Stubbs said the offer is all about doing good business.
"Our primary motivation is to increase investor returns here. It just does not make sense for us to deposit so much money at crazy low interest rates."
The funds for mortgages will come from reducing the amount invested in low interest bank deposits, but which will earn more even at the cheaper mortgage rate.
"It will certainly take some quality business away [from banks]."
Simplicity expected to lend up to $50 million to members in the first six months, with those interested to be drawn out of a monthly ballot.
The main retail banks have floating mortgages at around 5.6 pct.
To qualify applicants will need a minimum deposit of 20 percent, and the amount borrowed must be no more than 30 percent of an applicant's income.
"We are lending in a very safe manner. It will certainly not be for everybody," Mr Stubbs said.
Simplicity will not be subject to the same lending and capital rules as banks because it does not does not accept deposits but is only lending money it already has on hand.