The country’s biggest bank is offering a 10-year interest-only mortgage for investors.

The new offer from ANZ trumps the previous maximum interest-only term of five years.

An ANZ spokesman said the policy was a response to customer demand, citing feedback from residential property investors who wanted longer interest-only mortgage terms.

“This change simplifies that process for customers and means they can now choose a period of time that best suits their needs at the start of the interest-only period.”

Investors are expected to take up the offer because it would free up more cash and provide more security. But they would still need to pay off the principal. The biggest downside was that applicants would now need to prove they could repay their mortgage over 20 years rather than the typical 30-year term.

The move is expected to attract investors seeking extended cashflow and reduced administrative hassle.

NZ Property Investor’s spokesperson Matt Ball said the new offer would benefit both ANZ and investors. Paying interest only was a common strategy for investors and helped them grow their portfolio faster.

“ANZ’s move will be attractive to many investors, and the timing is spot on. They’re offering it at a time when many mortgage holders are coming off high fixed rates and are looking to refinance,”