Some of you may have noticed ASB advertising a home loan for 0% interest for the first month, that's no April Fools joke, they're really offering an interest free home loan. However this loan is likely to make fools out of a number of people who don't consider the true cost of the lending when taking up the promo.

Much like in 2013 when the banks were offering free TV's and iPad's, people can be bought by the banks with these gimmicks which seem to be an amazing deal on the face of things. Some of them are good deals, don't get me wrong, but you really need to assess the alternatives from other bank's and what you're giving up to take that deal. Could you save more money by taking a different/better deal than taking the TV or 0% interest for one month?

ASB's offering means you have to take a 3 year fixed rate @ 6.29% to get the first month's interest free. This equates to an interest rate over the 3 year term of 6.12%. If you break the fixed term you will be liable for break costs.

If you have a reasonable amount of lending we may be able to negotiate a 3 year fixed rate lower than 6.12% which would see you better off over the long term. This may be with your existing bank which may negate the hassle of moving lenders or may even be with ASB which would see you getting a better deal. It's always worth asking the question and assessing all of the options.

So on the face of it the 0% loan is actually quite good, but is it the right option for you? Would you be better off with a discounted rate over a shorter term or could you get a better deal? 

As always, we are here to help find the very best deal so if you, or someone you know, would like some advice on the best fixed rate options then get in touch