HSBC has cut its six month fixed mortgage interest rate, already the lowest advertised by a major bank, by 75 basis points to 4.99% from 5.74%.
However, the new rate has a couple of catches. Firstly, a customer has to take out a home and contents insurance policy with HSBC. If they don't, the rate on offer is 5.49%. Customers also need to qualify for HSBC's Premier service, meaning they need either a minimum combined home loan of NZ$500,000 or NZ$100,000 in savings and investments.
"If a customer were to take up HSBC’s 4.99% per annum six month rate, over that period they could save NZ$3,175 in comparison to the average six month fixed term rate offered by competitor banks," John Barclay, HSBC's head of personal financial services, said.
“Many New Zealanders are still finding the economic climate tough and these low rates are our way of helping them increase the equity in their homes which then allows them to consider alternative investment or lifestyle options,” Barclay added.
HSBC has been focusing on high net worth customers for the past couple of years having introduced HSBC Premier, its premium international banking service, to New Zealand in October 2008. This came after HSBC sold about NZ$700 million worth of mortgages to Kiwibank in 2007, which it had acquired from AMP four years earlier.
The cut to HSBC's six month fixed rate comes after Kiwibank yesterday trimmed 40 basis points of its six month fixed rate taking it to 5.95% for a "limited time only."
Both banks new six month fixed rates are lower than the variable, or floating, rates they advertise. See all bank mortgage rates here.