Interest-free Westpac loan targets rise in work from home

Westpac is banking on rising numbers of people working from home wanting to upgrade heating and insulation. Photo/ Chris Gorman

Rising numbers of people working and spending time at home has prompted Westpac to relaunch a deal offering up to $10k in interest-free loans to purchase heat pumps, solar panels, ventilation, double-glazing or insulation.

The bank announced the loans on March 13 but put a pause on them during the lockdown while it focused on dealing with the fallout from Covid-19.

Karen Silk, Westpac New Zealand customer experience hub general manager, said it now hoped the loan offer would enable people to have a better experience at home while also boosting businesses who install the products.

The loans are interest-free for up to five years and are only available to new and existing Westpac customers.

Silk said those who had taken an interest-free loan or home loan deferral would also be able to take up the loans.

The loan deal comes as research by the bank shows 70 per cent of those it surveyed expected to spend more time inside their house this winter than in other years.

Two-thirds of respondents said they had already noticed an increase in their power bill since New Zealand went into level 4 lockdown.

"We've all got used to spending more time at home recently and most people expect that to continue through winter. More than three out of five people told us they expect higher power bills and many of them were concerned," Silk said.

"That's why we're urging customers to think about using this interest-free loan to make their home warmer, drier and more energy efficient."

Silk said it didn't know what the take-up of the loans would be.

The loan is only available for heat pumps not other types of heating. Silk said that was because they were the most energy efficient.

She said the size of the loans would mean people could make a meaningful purchase. The bank would not be making money off the loans as they were interest-free.

Silk said if borrowers could not pay back the money within five years it would talk to them about the options.

"What we can say is it is definitely interest free for five years. At that point it may revert to part of the core home loan."

Borrowers have to use professional installers.