Chemical Bank has rolled out a new home equity loan to snag savvy homeowners in the post-refinance age.
The loan starts at a fixed rate of 9.95%. But homeowners have the option to adjust downward once at no cost if rates go down.
Since April, the new product has accounted for half of all new home equity loans at the bank, according to Lori Gerber, product manager.
The bank is targeting consumers who may be sitting on the fence, waiting to see whether interest rates rise or fall.
"We believe that there were a number of consumers who were hesitant to borrow," said Ms. Gerber.
"This allows them to borrow now, and have the security of knowing that if rates do fall in the future, they can lock in the lower rate for free." Perhaps just as important, Chemical sees the new loan as a way to retain existing customers.
Ms. Gerber confessed that most home equity borrowers try to refinance, if rates do fall - now that they have become old hands at the refinance game.
In the past, Chemical did not encourage such refinancing. But the bank now understands that if it doesn't refinance its home equity borrowers another lender will, Ms. Gerber said.
Loans up to $75,000 are covered under the new program. At $2.5 billion, Chemical has the 13th-largest home equity portfolio in the nation.
*** Fleet Creates TV Ads Featuring Employees
PROVIDENCE, R.I. - Customers of Fleet Financial Group, may soon see the familiar faces of Fleet employees on TV, including loan officers from Fleet Mortgage Group and a home equity officer.
Starting Monday, Fleet will launch a new television advertising campaign that it says will feature employees who help their customers achieve important financial goals and also take an active role in community service.
Robert Watson, Fleet vice president and director of corporate advertising, said the TV commercials will let the public know that Fleet "is aware that our achievements as a company depend on the critical contributions of our employees."
The campaign appears to be aimed at personalizing the bank and combating the increasing commoditization of banking services.
Three different ads, each featuring vignettes about three employees, will air throughout New York and New England.
