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HSBC trumps nearly everyone in the mortgage market with a very low rate for their Premier home loan offer. Only SBS Bank retains a 2yr toehold

HSBC trumps nearly everyone in the mortgage market with a very low rate for their Premier home loan offer. Only SBS Bank retains a 2yr toehold

The low and flat rates that have been evident in wholesale money markets have come today to the mortgage market.

Term deposit savers should be wary of this news.

HSBC has today launched a unique home loan rate card with the same rate for all its terms 1 to 5 years.

The rate is 5.29%.

That means this is the lowest rate offer for all those terms, except for 2 years where SBS Bank's 5.19% trumps it.

It also means ASB's claim of the 'lowest 5 year rate of 5.75% which they made this morning is already gazumped.

Since 2001 when our detailed records began we have never had any institution offer the same rate across the whole 1 to five year fixed rate tenors.

These HSBC offers are for their Premier 'special' rates. Premier standard rates have also been reduced today across all terms.

The 'special' rates are a limited time offer to new HSBC Premier customers, and existing HSBC Premier customers who borrow an additional $100,000 or more. To qualify for this offer customers must have at least 20% deposit or equity, and have their salary credited to a HSBC transaction account. 

You qualify to become an HSBC Premier customer either via a minimum combined home loan of $500,000 or $100,000 in savings and investments with HSBC.

This new flat rate offer is a consequence of the wholesale yield curve.

See all banks' carded, or advertised, home loan rates here.

The current non-rate incentive offers are here.

This is how mortgage rates from the banks compare on Friday, February 13, 2015:

below 80% LVR 1 yr 18 mths 2 yrs 3 yrs 4 yrs 5 yrs
             
5.39% 6.09% 5.39% 5.79% 6.49% 5.89%
ASB 5.59% 5.70% 5.39% 5.59% 5.99% 5.75%
5.69% 6.09% 5.39% 5.69% 6.49% 5.79%
Kiwibank 5.69%   5.55% 5.55% 5.99% 5.79%
Westpac 5.99% 6.09% 5.49% 5.89% 6.49% 5.99%
             
5.59% 5.49% 5.59% 5.74% 5.89% 5.89%
HSBC 5.29%   5.29% 5.29% 5.29% 5.29%
SBS Bank 5.59% 5.74% 5.19% 5.49%   5.79%
5.70% 5.80% 5.50% 5.95% 6.40% 6.50%

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Mortgage choices involve making a significant financial decision so it often pays to get professional advice. An AMP360 mortgage broker can be contacted by following this link »
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Fixed mortgage rates

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10 Comments

How long are we going to have this two tiered funding in NZ ?

"Hot " money flows in on term deposits , which the Banks lend at tiny margins, thus neutrlaising the RBNZ .

Our OCR  is simply out-of-kilter with whats going on outside

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'Hot' money (from yield chasing foreigners) does not flow to term deposits. No savvy 'investor' would risk the exchange rate risk for 4% over a fixed one year term. A few naive ones maybe, but their volumes will be tiny.

 

'Hot' money flows into very liquid bond and wholesale markets where you can cash out with a phone call or mouse-click.

 

International money flows to uridashi / eurokiwi / kauri issues. Those issues wash out via swaps (except perhaps uridashi from Mrs Watanabe). So I think you are overstating the issue significantly.

 

But if you mentioned that New Zealand household deposits are growing +10% pa while loan volumes are groing at ~+5% pa you might be closer to the mark. New Zealand household bank account balance growth is am important driver. Too much local money chasing much less local loan growth. Why borrow if your bank account is full?

 

And another issue will come up soon. The Government will be paying out its 15-Apr-2015 bond soon, paying investors their $7.5 bln. Where is that going to go? They are planning to pay back more than they borrow this year by about $800 mln. Savers bank accounts will get that too.

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And another issue will come up soon. The Government will be paying out its 15-Apr-2015 bond soon, paying investors their $7.5 bln. Where is that going to go? They are planning to pay back more than they borrow this year by about $800 mln. Savers bank accounts will get that too.

 

I doubt most of it (15-Apr-2015) will. The RBNZ has already bought back NZD 1.374 billion through open market operations and 63% is supposedly owned by foreigners and will find it's way back into wholesale funding markets as you have mentioned.

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". Why borrow if your bank account is full?"

True, so why are there so many complaints about NZers not saving (ie getting involved in one of the _worst_ rates of return for your money?)

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"except for 1 year where SBS Bank's 5.19% trumps it." Chart above shows 5.19 being a 2 year rate.

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aahhh, you are right. Fixed now. Sorry

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Is this the same bank involved in all that money laundering/corruption?

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And of course the great thing with HSBC is you don't have to pay any tax ;)

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David Chaston:

 

"Since 2001 when our detailed records began we have never had any institution offer the same rate across the whole 1 to five year fixed rate tenors."

 

Wrong!

 

In early 2009, ASB had all rates at 5.99% for about two weeks.  It was February I think.  Do I have to go and find the adverts to prove it?

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2009? That just shows how crazy this market is at present when home loan rates are even lower than the peak negativity brought about by the GFC. This when immigration is booming at record levels and house prices are already 50% in many auckland cases meaning masses of equity rich people, accessing cheap lending, seeing potential tennents flooding in through the airport gates.

Property prices up another 15-20% this year, with gains spreading out of auckland and into the higher yielding secondary cities. Unless gov does something soon.

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