Capital G Bank is offering reduced fees, home owners insurance and a credit card with a new bundled mortgage package unveiled yesterday.

The Capital Guard Mortgage is the first bundled lending product from the bank and its sister company Colonial Insurance. It combines a variable rate mortgage with a Colonial Home Options Insurance Policy.

Capital G Bank president and chief executive officer Sarah Farrington said: “We'll always be distinct separate companies but if we can make better products by combining things to make them better for the customer then obviously we will and we will try to explore bundling generally within the group, within the Capital G companies as well as Colonial Insurance.”

Within the new package, the bank will reduce the loan fee customers will pay to half a per cent of the principle up to a maximum of $2,000. It will also pay up to $2,500 of the first year's insurance premium and administer the ongoing payment of the insurance premium in future years. Capital G is also offering to arrange for discounts on the cost of future car and bike insurance with Colonial Insurance Limited.

Mrs. Farrington said that while the bank has not discontinued its other products - a customer can still come in and get a regular mortgage - the new bundled package will lead to cost savings.

She said: “We're actually paying up to $2,500 of the customer's first year insurance premium so that is obviously cost savings. If they went to a different insurance company they would have to pay that themselves.”

The mortgage package also includes a Visa Prestige Credit Card which has a minimum limit of $5,000 and an offer to waive the annual membership fee for the first year.

“The idea is that customers could use the credit card for incidental purchases in relation to the house such as if you needed to furnish it,” Mrs. Farrington said. “What we're trying to do is ease the process by bringing together three separate produces and making them one bundle.”