HSBC Premier rates for 1 and 2 year terms set at 4.95%, in addition to cutting their floating rates by -24 bps

HSBC Premier rates for 1 and 2 year terms set at 4.95%, in addition to cutting their floating rates by -24 bps

(This story has been corrected.)

HSBC has not only reduced its floating rates, it has cut its one and two year fixed rates.

These reductions apply to HSBC's Premier offerings.

Firstly, HSBC has passed on almost all the OCR reduction to their customers on floating rates. They are giving them a -24 basis points reduction even though the OCR was cut -25 basis points.

After the cut, HSBC's floating rate still will not be competitive with other banks who started with lower rates.

But they are leading the market for one and two year fixed home loans.

They have cut their one year fixed rate by -25 bps from 5.20% to 4.95%.

This maintains their very sharp pricing for this term. They were already the market leader before the change.

For two years the cut is even higher; they have reduced their 5.30% rate to 4.95%, a reduction of -35 bps.

These home loan rates are being offered to new and existing HSBC Premier customers. To qualify for this offer customers must have at least 20% deposit or equity, 30% in the case of new residential investment lending on Auckland housing, and have their salary credited to a HSBC transaction account.

The only other home loan rate below 5% is the 18 month fixed offer from the Cooperative Bank who have a 4.99% rate at that term.

Of course, all rates reported here are carded rates; in negotiation you could well achieve lower offers, even from banks with fixed rates who seem 'uncompetitive'. But your negotiating ability will very much depend on the financial strength you offer to the bank. And for investors, that now means an LVR situation lower than 70%.

We are entering a new phase of rate competitiveness as wholesale rates fall and steepen, and a raft of rate-offer changes are expected over the next few weeks.

However, this situation is coming in a winter where loan demand and real estate transaction levels have been strong. The 'season' is extending this year, deep into winter.

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

And see the non-rate home loan incentives here.

This is how mortgage rates from the banks compare at Friday, June 12, 2015:

below 80% LVR Floating 1 yr 2 yrs 3 yrs 4 yrs 5 yrs
             
6.49% 5.59% 5.39% 5.59% 5.75% 5.79%
ASB 6.50% 5.35% 5.39% 5.39% 5.99% 5.65%
6.34% 5.35% 5.39% 5.49% 5.65% 5.75%
Kiwibank 6.40% 5.39% 5.39% 5.39% 5.99% 5.60%
Westpac 6.40% 5.25% 5.39% 5.39% 5.75% 5.79%
             
6.45% 5.29% 5.39% 5.49% 5.69% 5.69%
HSBC 6.60% 4.95% 4.95% 5.40% 5.50% 5.60%
SBS Bank 6.65% 5.59% 5.35% 5.35%   5.35%
6.74% 5.55% 5.29% 5.40% 6.40% 5.85%

Correction: The original version of this story mistakenly referred to the HSBC floating rate cut as a -14 bps reduction. It is in fact a -24 bps reduction. The above version reflects this change.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.