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HSBC NZ launches its lowest ever mortgage rate, but only for owner-occupiers who are HSBC Premier customers

HSBC NZ launches its lowest ever mortgage rate, but only for owner-occupiers who are HSBC Premier customers

HSBC is launching a 3.79% two-year home loan "special" interest rate, which the bank says is the lowest ever rate it has offered in New Zealand.

The catch is the offer is only available to owner-occupiers who are HSBC "Premier" customers. The bank's Premier customers must have either a minimum combined home loan of NZ$500,000, or NZ$100,000 in savings and investments with HSBC.

HSBC says the 3.79% two-year offer is being made to new Premier customers, and existing Premier customers who borrow at least an additional NZ$100,000. To qualify, these customers must provide an owner-occupied property as all or part of the loan security. Minimum deposit and equity criteria also apply.

“This market-leading 3.79% p.a. two-year-fixed home loan rate provides owner-occupiers with a great opportunity to refinance their mortgage with HSBC. Our consistent track record of offering attractive home loan rates in New Zealand should also reassure them about refinancing with us,” said Glen Tonks, HSBC NZ's head of retail banking and wealth management. 

"This 3.79% p.a. ‘special’ interest rate for two-year-fixed tenor is its lowest-ever residential mortgage rate in the New Zealand market, trumping the 3.95% p.a. for the 18-month-fixed tenor the Bank launched on 17 February 2016, which at the time was the lowest residential mortgage rate in the New Zealand market for over 50 years," Tonks said.

The next lowest carded, or advertised, two-year bank rate is SBS Bank's 4.15%. TSB Bank has a 4.19% rate, while ASB, BNZ, the Co-operative Bank, Kiwibank and Westpac have 4.29% offers, and ANZ 4.35%. See all banks' carded, or advertised, home loan rates here.

HSBC is also reducing its Premier floating home loan rate by 16 basis points to 5.59%, and its Premier revolving credit home loan rate by 10 basis points to 5.79%.

The new rates take effect today (Wednesday).

Floating Prior rate New rate Change effective from
  % % % for existing clients
         
5.64 5.59 -0.05 29 August 2016
ASB 5.65 5.55 -0.10 24 August 2016
5.69 5.64 -0.05 29 August 2016
Kiwibank 5.45 5.25 -0.20 29 August 2016
Westpac 5.75 5.65 -0.10 31 August 2016
         
5.45      
HSBC 5.75 5.59 -0.16 17 August 2016
ICBC 5.60      
HSBC 5.69 5.54 -0.15 18 Sept 2016
5.54      

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44 Comments

And so the price war begins......
At least someone is passing something on to the general public!

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Wow , how do they do this ?

Their funding mix must have a shed-full of overseas deposits at very low rates.

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The 'special' rates from the other banks get discounted further. It is a sharp rate but when others are offering 4% it isn't that much more. They are also cherry picking customers, although $500k mortgage on your own house is quite high and existing customers only get the new rate if they borrow another $100k or more. I also imagine there are no cash backs or steak knives etc included with it. I know someone who got 4.04% for 2 years and got $9k cash back on $750k in the last month or so.

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Wow, $9k cash is a bit out of market! But, regardless, most will get you 50-70bps cash, so let's say 35bps split over the 2 years = effective 4.14% rate, not far off the majors, who have branches, ATMs etc. It's just a play for some media time.

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I couldn't believe it until he showed me. Another offer was $7k in cash and slightly worse rates. There won't be huge numbers of people that will meet the required criteria so it will be some free (or at least very cheap) advertising.

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I see a report on BLOOMBERG that the big UK banks are getting ready to domicile their head offices outside the UK (London ).

We should be really cheeky and offer them incentives to set up their head offices right here in Auckland .

Now that will get us off the low wage rung which has held us back

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You mean like the financial services hub that John Key talked about a few years ago?

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No chance we're not part of the EU so they won't be interested in little old NZ. They'll be looking to set up most likely in Dublin Ireland.

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The issue with NZ is that it operates outside of most other places' timezone.
.
For a global operation that's quite a headache.
Also - RBNZ requires banks to be cashed up, here, which is unusual in the financial industry.

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Any particular reason you can't call out said bank (9k and rate info), I'd be keen to knock on their door!

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You went away and left me long time ago
And now you're knocking on my door
I hear you knocking
But you can't come in

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Get a good mortgage broker. It was BNZ but ANZ weren't far off. Westpac wasn't even in the ballpark. ASB were competitive on rates but no cash in the offering.

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BNZ going hard to try and make brokers like them I suspect, re-entering selected broker market. They have 4yr clawback so one may wonder how they'll price at end of 2yr fixed term....

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my understanding is that it is an 18mth clawback but that might be the brokers one (if you change banks and don't give them the opportunity to match any other deal you get)

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Bnz is definitely 4 year term for cash clawback from customer. 18m clawback is probably on commission!

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Yes correct 9k cash bonus sounds like a lot, but with a 4 year bond you would be better with 6k and a 2 year bond, which is the way we went.

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At least it's only for owner occupier.....

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Give it another year, I'm sure we'll be looking at rates of 2.5% for mortgages.

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I don't see that happening. They will struggle to get funding for rates like that. It won't be good for us if we get them.

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Er, that would indicate Td rates of 1.5% for 2yrs and savings rates of... Well, if we're lucky, they won't charge us. Let's hope you're wrong

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I'd be happy with lower mortgage payments.

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me too but it will also mean larger mortgages for anyone buying. FHB's will be worst hit. They will have massive mortgages and paying them off will be even harder. Any increase in rates will really hurt them too.

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except that while the interest rate would be lower, arguably the actual payment wont be , because cheap credit drives house price inflation so 2.5% on a loan twice as big as it should be is not better!

Not to mention no one will save when the savings interest rate = 0%, so trouble getting funding, so the cycle continues.

Let's take singapore as an example : can get loan rates for 2.50% there. Guess the 1 year TD rate... 0.25%, wow, how generous. Or what about a 5yr TD for 0.75%! Yikes.

http://www.deposits.org/world-home-loans.html

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Worse still, you will be exposed to the risk of higher rates and trying to pay it off faster will be less effective as the interest saved won't be as much.

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Awesome rates HSBC! We left an Aussie bank earlier this year for
HSBC and while their digital platforms and customer service are from the dark ages that is irrelevant when my mortgage repayments have literally halved. The big four are like a cartel seriously someone should investigate their often similar front desk approaches when customers are shopping around for a mortgage - it's surely anticompetitive- none in the big four will go sub 4%, all offer cash but bonded to a set year to loan size ratio but no problem for HSBC to bring first world interest rates to NZers.

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Their rates aren't half the majors, so presuming you fixed in earlier at a much higher rate. If you factor in no cash (even though there are costs to refinance) the offer is no better than others unless you have a massive loan. As an existing HSBC customer you cant even get that rate unless you add $100k in debt... (false economy) ... that's a bit stink!

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- This is all interesting reading . Having previously worked for one of those large Australian banks for over 30yrs, it continues to amaze me, that the population of property owners who bank with these firms, continue to accept the cash payments for moving your mortgages to them and inevitably between them. The banks offer cash towards solicitors costs or simply a cash contribution and you all will have supposedly signed an acknowldgement that if you refinance in 3 yrs you will be required to pay this back. The payback, I believe isn' t really an issue ,because your next anticipated bank cash payment will probably cover the payback of the last one you got. The cash contribution the bank pays you compared to what they will take off you over a 25yr term is laughable. Best way to beat a ban,k is start minimising the interest dollar they are taking off you. Start trying to pay off as much or as little in additional principal payments that you can. Every dollar off a loan balance for as long as possible allows you to avoid paying more interest on interest in the long run. Start giving it a go and stop grizzling about interest rates and do something about the level of interest dollar they charge you. The banks make interest on your interest in your mortgage.

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I endorse this approach. On iOS there's an app called loanCalculator that shows total interest paid for the life of a loan. If people focus on reducing the total interest paid over the course of the entire loan the interest rates diminish in importance. Of course if people do the math they will see that a shorter term and higher payments can make a difference in the order of hundreds of thousands of dollars in interest.

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Yes. Getting rid of the debt is the way. Hard at first. But the exponential curve is a marvellous thing at killing interest bills.

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absolutely! as with all debt, the sooner gone the better. When rates are at historical lows, best to pay max. The danger of all these Aucklanders who think they're millionaires is they start using their mortgages as ATMS and end up way worse off over the long run. Nuts.

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Bingo. The Bank also treats you as VIP customer only when there are large deposits/loans, but once you paid off the loan, you get no fee concessions. Go figure.

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Who needs to be a VIP customer Smokey. Only way you get to be one of those is if the banks are making a fortune out of you. If you are a VIP customer it's happy them, not happy you.

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Yes, the sooner one pays off the loan, the better lifestyle can be enjoyed. But many FH buyers go for big houses with large mortgages, so their ability to pay off quickly is crimpted.

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I refer to that as buying too much house. The same as people spending too much on a car or a sensible car that they added $15,000 of extras, too much car.

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I hope someone with more knowledge than me can clear this up . I know the banks used to show you paying the interest off on the whole term before paying any capital off . For e.g you pay of the interest for 20 years and the last 10 years pays off the capital amount . But I dont believe you are actually charged this, providing you are paying more than just the interest on the capital amount. Your montkly payment pays the interest for that month , plus any extra you pay comes off the capital amount . So how are you paying interest on interest ?( apart from possibly between when the interest for the month is calculated , and when you actually make your payment?

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No, you don't pay interest on interest on a normal table loan. However, the quicker you pay it off (eg pay $100 more than you need to) you'll pay far less overall and far less in interest over the life of the loan

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Does it mean the fixed loan rates are going to go down soon some more ? The overseas funds have become cheaper or what ? Or Banks incorporated overseas have an inherent advantage, because of the funds they can command there ?

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Sorry, don't agree that paying off debt is the correct thing to do in some instances!
There is good debt and bad debt.
Providing the debt is purchasing assets that are producing more income than you are paying in interest then
You are going forward.
Leveraging is the only way to go when you are getting returns of 8 to 10 per cent and you are not having to put
Any of your own money in.
The worlds financially most successful would agree with me.
However if you are negatively geared then yes pay off the debt as quick as unless you have got better use for the money.

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name these financial Gurus that tell you to take on debt and I will match you with the one guru that calls all debt bad
warren buffet
http://www.buffettsecrets.com/warren-buffett-debt.htm

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Yes. There is good debt and bad debt. But having no debt aces both.

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Most extremely wealthy self made people have used debt to get where they are today.

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-Solardb: If you have a normal table mortgage based on a repayment of Principal and interest with a frequency of Fortnightly or Monthly , you will see when you make the loan payment into your loan account your loan balance will reduce by that payment. The next thing you see, will be the amount of interest come out of the loan account which goes to the bank and accordingly you will see your loan balance increase by the amount of that interest calculation for a fortnight or a month . I.e. The loan balance less your payment plus the banks interest will equal your new loan balance. The bank calculates interest based on your loan balance and that loan balance now consists of the interest amount they just debited to your loan account. So if you had a $100 loan and your payment was $10 and of that $10 , $2 was interest. your loan balance after your payment would be $92. The bank begins calculating interest on the $92 not the $90. I hope that helps :-).

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- There are a few ways of avoiding that interest on interest but for some it can prove quite tough based on the level of payment or the type of loan you need to put in place. Hence the comment if you can reduce that table mortgage loan balance as much or as little as possible and keep it that way and as often as you can your interest dollar cost in the long run can be greatly reduced.

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- There are a few ways of avoiding that interest on interest but for some it can prove quite tough based on the level of payment or the type of loan you need to put in place. Hence the comment if you can reduce that table mortgage loan balance as much or as little as possible and keep it that way and as often as you can your interest dollar cost in the long run can be greatly reduced.

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