HSBC announced its market-leading home loan 'special' will end soon, removing the only sub 4% rate from the market

HSBC announced its market-leading home loan 'special' will end soon, removing the only sub 4% rate from the market

HSBC has advised that its 3.95% 18 month fixed hoime loan rate for Premier customers will end on Friday, May 20, 2016.

To qualify for this rate an approved loan application will need to be drawn down by May 31, 2016.

This mortgage rate is currently the lowest in the market.

However it is only available to borrowers who qualify for Premier status, which requires either a high loan amount ($500,00 or greater), or the client has at least $100,000 deposited with the bank. Clients who have accounts with an HSBC branch overseas also automatically qualify.

The bank is focused on growing market share in its target market, which is defined as "mass affluent customers, with incomes over $120,000, and who have international needs". This is where the Premier criteria is aimed.

The offer is available to new HSBC Premier customers or existing HSBC Premier customers who borrow at least an additional $100,000. To qualify for this offer customers must have at least 20% home loan deposit or equity (or 30% for investment properties in Auckland) and have their salary credited to a HSBC transaction account.

This offer launched on February 17 and despite wholesale rates that fell sharply after that, no other bank followed it down below 4%.

HSBC has always maintained business done at this rate was profitable for it.

Here is where fixed rates stand now:

below 80% LVR  1 yr  18mth  2 yrs   3 yrs  4 yrs  5 yrs 
  % % % % % %
4.25 4.89 4.35 4.99 5.20 5.30
ASB 4.15 4.15 4.39 4.65 5.00 5.15
4.25 4.99 4.39 4.64 4.99 5.15
Kiwibank 4.29   4.25 4.75 4.90 4.99
Westpac 4.25 4.95 4.39 4.80 5.09 5.19
             
4.25 4.35 4.35 4.65 4.89 4.99
HSBC 4.25 3.95 4.39 4.59 4.79 4.99
HSBC 4.10 4.35 4.29 4.65   4.99
4.35 4.35 4.19 4.79 5.35 5.35

In addition, BNZ has a fixed seven year rate of 5.55%, while TSB Bank offers a fixed ten year rate at 5.75%.

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Really like this matters when we all know that the OCR rate is going to drop, will HSBC and other banks still be able to charge 4% + when we're eventually down to an OCR of 0.5%?

As and example; the Banks of England rates is currently 0.5% and HSBC are offering UK customers who have good loan to value. 2 year fixed rates deals at 1.49%
Have a look at: www.hsbc.co.uk

Yet we have the most expensive house prices in the world in regards to income ratios. Something has to give and soon in the NZ property market.

What are you suggesting - NZ lower it's interest rates - why? Just because the rest of the world has problems and has lowered it's interest rates doesn't mean New Zealand has to as well. New Zealand isn't struggling economically - it only appears that self serving greed is the reason people want lower interest rates ( and don't trot out the interest rate argument - there are other market conditions that are more influential in determining the exchange rate than interest rates - pure speculation is one example). If you want those lower interest rates move to the UK.

Just because the rest of the world has problems and has lowered it's interest rates doesn't mean New Zealand has to as well.

Actually it does.

Unless NZ wants parity with the USD.

We may get parity no matter what we do. There is no guarantee that lowering the interest rate will result in a lower exchange rate. Didn't work last time and I suspect it won't work if the interest rates are dropped again. You are making the assumption that the normal exchange rate / interest rate mechanism is working. There are other factors that are affecting the exchange rate that we can't control.

Don't disagree with you, however, it is inevitable that NZ will be forced to keep lowering the OCR in line with all other developed economies. Whether we like it or not.
And regardless of how reluctant Wheeler is to cut.
The only reason for the delay in cutting is the fear of reaching ZIRP with no ammunition left.
Aucland housing is a lost cause and simply a sideshow.
Interest rates are no longer having any restraining power over housing.

Why? Because according to all the banks, our rates are higher due to the offshore funding the banks are taking out.

This is what I fail to understand. Overseas rates are all at or around Zero. OCR is still over 2% here. So how is it a NZ/AUS bank can't get cheaper funding?

Lets all feign surprise at the next record bank profit announcement in NZ.

500k used to be a substantially sized mortgage.
Not so much anymore!

Maybe they'll go even lower after this date.... that'll piss the other banks off . Been in negotiation with the bank to fix a relatively small amount of 100k for a year. Seems to be this line-in-the-sand with all the banks at 4.1%. Anyone bettered that with similar amounts?

to some 100k is not a small amount,
that's the problem with creating money it becomes worth less and less

For a mere 100k you may as well do a couple of balance transfers on 2 or 3 credit cards and enjoy 0%