HSBC launches a 3.85% 18-month mortgage rate, a 50 year low

HSBC NZ makes an off-season strike with a very low mortgage rate offer, hoping to build on its fast-rising market share growth

6th Jun 18, 10:26am by David Chaston

HSBC has launched a new limited time, very low interest rate home loan offer.

For Premier customers, the offer is 3.85% fixed for eighteen months.

This is the lowest rate we have seen in the New Zealand market for more than 50 years, a multi-generational low.

HSBC’s standard fixed-term home loan mortgage rates for 1-year, 18-month and 2-year tenors are also currently market-leading.

HSBC has enhanced its reputation in offering low, sub-4% home loan rates. In fact this is the bank's fifth sub-4% rate offer since February 2016.

These low offers have seen its market share rise as customers respond to the aggressive pricing.

Winter is normally a time when mortgage market competition is restrained, so their timing is interesting in that regard.

This 3.85% p.a. ‘special’ home loan rate is being offered for a limited time to both new HSBC Premier customers and existing HSBC Premier customers.

To qualify as a Premier customer, new clients need to have a "combined home loan" of $500,000, or they need to have $100,000 in savings and investments at HSBC.

Existing customers qualify if they borrow at least an additional $100,000.

Minimum deposit and equity criteria also apply to both groups.

“Why wait for the spring mortgage campaigns if you’re wanting to buy a residential property, move house, or refinance an existing mortgage? ” said Glen Tonks, Head of Retail Banking and Wealth Management at HSBC in New Zealand.

Update: HSBC has also indicated a broader appetite for loans to residential housing investors. Previously, an owner-occupied residence was required as the basis of security, but they have now indicated more flexibility on this requirement.

HSBC’s standard fixed-term home loan mortgage rates for 1-year, 18-month and 2-year tenors are also currently market-leading.

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

Here is the full snapshot of the fixed-term rates on offer from the key retail banks.

below 80% LVR	6 mths	1 yr	18 mth	2 yrs	3 yrs	4 yrs	5 yrs
as at June 6, 2018	%	%	%	%	%	%	%

	4.99	4.35	5.15	4.55	4.99	5.89	6.09
	4.95	4.39	4.49	4.55	4.79	5.39	5.59
	5.35	4.39	5.05	4.55	4.99	5.89	6.09
	4.99	4.29		4.49	4.85	5.19	5.39
	5.25	4.39	5.15	4.55	4.94	5.89	5.59

	4.80	4.29	4.45	4.55	4.89	5.39	5.59
	4.85	4.19	3.85	4.29	4.89	5.29	5.59
	4.99	4.29	4.59	4.55	4.99	5.49	5.55
	4.85	4.29	4.39	4.55	4.89	5.55	5.69

In addition to the above table, BNZ has a fixed seven year rate which is 6.15%.

And TSB still has a 10-year fixed rate of 6.20%.

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68 Comments

by President of P… | 6th Jun 18, 10:39am 1528238393

I'm changing banks
President of Property...

by BadRobot | 6th Jun 18, 10:55am 1528239315

Go for it - you just have to meet their requirements.....

by President of P… | 6th Jun 18, 1:43pm 1528249399

You never know... they might roll out the red carpet given the multiples, which may not be everyones cup of tea, but i would be saving tens of thousands....
President of Property

by Grendel | 6th Jun 18, 2:05pm 1528250721

"given the multiples" of what?

by President of P… | 6th Jun 18, 2:11pm 1528251100

monkeys

by Grendel | 6th Jun 18, 2:21pm 1528251676

Who's the monkey?

by Nic Johnson | 6th Jun 18, 11:20pm 1528284009

mouldy cabbage houses that no one else in Auckland is buying anymore....

by Chessmaster | 6th Jun 18, 2:14pm 1528251279

I talked to them last time, a month or so ago when they offered 3.95%. they very keen to get new customers, in the end my bank made it difficult to leave with a very good offer, luckily I didn't fix. This new rate by HSBC makes things even more interesting so I might switch.

by Nic Johnson | 6th Jun 18, 10:45pm 1528281934

Your too risky Cheese master.. Cheese needs to travel too far to stay fresh when exported from NZ..... also and as an aside, because I'm sure it doesn't relate to your cheese... there is.no way HSBC will touch negatively geared cheese with little equity.... They are far too clever for that -- they'll cherry pick the best.... not sure if you'll qualify...

by Chessmaster | 7th Jun 18, 7:26am 1528313217

Be careful what you say mate. Since you're scared about getting sued. Not willing to share a property address thinking you'll get sued but ready to say this about me without knowing anything about me. You want get sued for defamation haha. Your kids probably renting or working for me or renting and my taxes probably paying for your pension or you still skimming off the UK pensions (you really need to go back). You need to be banned from this site with all your bullshit stories. Can't believe you still here after a number of people proved you're an absolute bullshitter.

Also stop referring to HBOS, Northern Rock and bank of Scotland stories. That's history now and they were run by crook poms like you and not relevant for NZ.

by printer8 | 6th Jun 18, 10:51am 1528239119

Definitely an opportunity for FHB during the winter (at least) cool period for property prices.
Adrian Orr has commented that he sees property prices as being fairly stable in the medium term with a 2 to 3% pa future growth. Given all the speculation as to the future of the market, he/the RBNZ are the one person/organisation I would be listening to regarding this as they are the only ones that have some influence on the market (i.e. managing OCR and LVRs). It is not in the banks interest to see a "crash" in the property market due to the negative effect on the wider economy. Increasing property prices - such as during the GFC - give people as greater sense of wealth and a propensity to spend so is a stimulus effect to the wider economy (and a contributing reason as to why the NZ economy did well during the GFC). Equally, neither the RBNZ nor the government are keen to see the property market crash due to the negative impact on the wider economy.
The property market is likely to be subdued in the foreseeable future as the Auckland market is currently over-priced in terms of both rental yields (so investors are selling rather than buying) and the house price to income ratio.
So if a FHB is thinking of buying, it is not a case of trying to wait to pick the bottom of the market. The market may cool - especially during the winter period* - but the best buys will come from finding an individual property below market value from a vendor under a little pressure. The low success rates at auctions suggest that there will be some of these vendors (e.g. under pressure due to a shift or marriage breakdown). (* Written prior to the latest B&T figures just released – an expected trend.)
So given the future stability of the market, a good time for FHB to take advantage of good rates such as this, or use it rate to negotiate with their bank. While mortgage repayments may need a serious commitment now, the future for wage growth is really positive (e.g. yesterday's government announcement) so the pain is not likely to be long term with potential wage increases. There is some indication of future interest rates rising (e.g. USA) in the medium term, but a return to the historically NZ high rates of 7 to 8% seem a long way off.
So FHB, despite winter, the sun shines a little for you are feeling left out the past few years.

by rastus1 | 6th Jun 18, 10:57am 1528239445

were you paid to write this add?

by Bobster | 6th Jun 18, 11:42am 1528242126

Yeah that was weird. Roll up, roll up to catch the falling knife

by BuyLowSellHigh | 6th Jun 18, 12:44pm 1528245850

Roll up, roll up, trend is your friend.

by Nic Johnson | 6th Jun 18, 11:56am 1528242972

printer8 - The lack of honest commentary for FHB's has already suckered many of them into the debt trap. Annual reporting of year on year prices has meant that for the last half year the falls in values - pretty much everywhere have not been reported as anything other than slowing growth. When in reality - like Australia we are in the early phase of a crash and a FHB has far more to gain by delaying their purchase decision or bargaining very hard. You did read the Barfoot report I see, information that the ban sponsored mainstream media continues to hide from the public and it is only at places like interest.co.nx that the truth can be seen..

by printer8 | 6th Jun 18, 1:46pm 1528249573

At some stage FHB need to get into the market.
When will the market bottom out? Agreed markets in other countries have seen falls of 5 to 10%.
What will happen to markets here?
Agreed as pointed in my comments, houses are over valued in terms of both potential rental yields and value vs income.
Is a substantial fall likely in the New Zealand market? Anybody can guess. However it is worth considering that Adrian Orr who has some influence on the market (OCR and LVR) sees house price inflation of 2 to 3% in the medium term; and the RB has a vested interest in ensuring that there is not a price "crash".
How do I personally feel? I see a 5 to 10% drop in the market followed by a period of price stability in most NZ regions (but not Auckland) as after the last boom 2002 to 2008.
So, I see some downside rather than the reverse.
So should a FHB wait?
Well, not all properties sell at the market price. Going back, in times when the markets were not booming (as over the period 2010/1 to 2016/7), property investors were looking for discounted properties (e.g. mortgagee sales, marital splits etc) where there was pressure to sell. I haven't heard the local property investors mention such sales recently, but expect so over the next few years.
My argument is that for FHB, I don't see any substantial crash (due to RBNZ influence) and that as interest rates are currently low, look for that house that they can get below market value.
Remember that FHB buying a property is not all about $$ short term as for a property investor; it is as much about intrinsic value and long term. A short term 5% - or even 10% - drop is not important as long term prices are likely to rise. As I have previously said on this site; find the ideal property, avoid agent speak and bargain hard (e.g. remember 70% of properties are not selling at auction i.e. vendors bottom their minimum price).
The risk for FHB is not house prices - rather the ability to service their mortgage. In the medium term, interest rates are likely to rise, but so to are the indications that there we are likely to see wage rises across many sectors.
Finally, I would like to think that the NZRB prediction on the house market is a little better researched and reasoned that an individual's gut reaction.

by theglc | 6th Jun 18, 2:21pm 1528251671

I can agree that FHBs may be able to pick up some bargains over the winter and if they are going to live in that house for a long period the risk is reduced .......... providing they can positively answer the following questions positively

- how secure is my job and will it survive a recession
- Will I be able to cover my mortgage adequately if the interest rates were to double
- If I buy now and prices continue to dip another 20% how will that make me feel

by Houseworks | 6th Jun 18, 10:07pm 1528279672

Further questions for a First Home Buyer to ponder:
- can I cope with the stress of these unknowns
- can I compete with investors chasing the same property I want, it's probably a lot easier to give up now
- if I bag a "bargain", maybe it wasn't actually a bargain, it could be a scam by the investor or homeowner vendor to offload their property before the market dips as they probably know more than me about what will happen
- will I be alive tomorrow, I may die during the night

by Chessmaster | 6th Jun 18, 2:57pm 1528253831

You souldn't talk about lack of honesty, Nic. What's the address of the property that sold at a $400k loss. Did you dream that up? You won't get sued as public information. You need to be banned from this website.

by mja | 6th Jun 18, 3:30pm 1528255840

As I commented on the initial thread, the property Nic refers to is in the Wellington region. Went unconditional approximately 3 weeks post mortgagee auction, where was passed in at 710K. The bank was reluctant to accept large short fall, but eventually had to face reality that 775K was the best they could get at the time.

by THE MAN 2 | 6th Jun 18, 5:38pm 1528263538

MJA, you are talking BS as well as Nic Johnson.
So Nic Johnson lives in Wellington as he went to the auction.
MJA what is the address of this property in Wellington then and how do you know that is what he is talking about unless you are a mate of his and trying to cover up,on his BS as he has never said the place was in Wellington.
The Wellington market is good so why the big loss, you are talking BS as well!

by mja | 6th Jun 18, 6:14pm 1528265646

I do not know Nic, but do know the property. Low sales price as concern as still occupied by defaulting mortgage holder, and the property had not been maintained. The property was basically purchased for land value, flat 2 acre site with native bush, on town services with 45m street frontage.

by Chessmaster | 6th Jun 18, 9:43pm 1528278235

Nic, tried to make that out as end of property and big losses coming up. He BSd a whole story behind it. I see his still silent. The guy has lost credibility and should go back to England

by Pragmatist | 17th Dec 19, 8:59pm 1576569541

by THE MAN 2 | 6th Jun 18, 10:13pm 1528280010

So Nic Johnson went to the auction in Wellington did he?
You can confirm that over a million dollars was lent on that property and sold for 775k

What was the address of this property and I will check the facts are true as MJA said.

You are covering up for someone with BS!

by Nic Johnson | 6th Jun 18, 10:24pm 1528280679

Evening gents... Cheesemaster and George Gregan (THE MAN #2) I had no idea that you were still focussed on yesterdays story, I've been waiting for you on the Barfoot and Thompson crash page...... feel free to join me there, There is an invite set up for your comment, Ecobird, Double GZZZ,,,,, TTP are all absent so far.. Come and join us there... real stats, a timeline,,,, some pain for some but fun for others its like watching Love Island!

by Nic Johnson | 6th Jun 18, 10:34pm 1528281275

for those of us that are attractive because we have no debt and big swinging paid for (assets) its a fun place to be! for those that have big swinging mortgages for life....... yeah, less of a forum for those guys...good luck... You know who you are.

by gingerninja | 6th Jun 18, 10:40pm 1528281652

Some people are so emotionally and psychologically wedded to the belief that house only ever go up in value they can't actually accept anything else.

by Nic Johnson | 6th Jun 18, 10:51pm 1528282292

Hey Cheesy... come and join us on the Barfoot and Thompson 8.9% off the market since last March 2017 page....... bring THE MAN with you... Lets discuss all things openly.... and don't hide.. every time you speak there I am happy to respond...... man to man Cheesy? LET'S TALK CRASH TOGETHER!!!

by J.C. | 6th Jun 18, 11:09am 1528240198

It is not in the banks interest to see a "crash" in the property market due to the negative effect on the wider economy. Increasing property prices - such as during the GFC - give people as greater sense of wealth and a propensity to spend so is a stimulus effect to the wider economy (and a contributing reason as to why the NZ economy did well during the GFC). Equally, neither the RBNZ nor the government are keen to see the property market crash due to the negative impact on the wider economy....................................

That's almost like saying that the health, vitality, and prospects of the NZ economy all hinge on the price of houses. I'd imagine the Hosk could use this material after a bit of a rewrite.

by Yvil | 6th Jun 18, 7:43pm 1528270981

Well, "the health, vitality, and prospects of the NZ economy" would take a massive hit if house prices crashed because of the large amount of borrowing and indeed it would lead to a recession

by BuyLowSellHigh | 6th Jun 18, 7:59pm 1528271982

Many here are hoping for a crash (and don’t realise that hoping it so doesn’t make it so) because they are either bitter or think it will enable them to get onto the property ladder for cheap. Completely disregarding the fact that the economy would be in ruins, banks wouldn’t be lending, and they may even be out of a job.

by bw | 6th Jun 18, 11:12am 1528240324

but the best buys will come from finding an individual property below market value

There is no such thing as 'below market value'. Any transaction that involves a buyer and a seller IS market value. What I suggest you mean is that a buyer should try to pick value in a property that no one else sees - and that, is a risky business!

by printer8 | 6th Jun 18, 5:15pm 1528262152

Come on!
A valuer will give you a market value, but a property will most likely sell over or below that.
Talk to any long term property investor; they are not going to pay market value. In previous subdued market periods you would see property investors flocking to mortgagee sale, marital splits, estates.
With the booming market over the period 2010/1 to 2016/7, buyers bought knowing that if they paid slightly over the top it was not important. With a subdued market, a little more care and being selective is required.

by Clementé | 6th Jun 18, 11:38am 1528241915

Why so squarely aimed at FHB? Why not everyone with a $500,000+ mortgage? Or its it that FHBs that are an essential foundation to the market that seems to be slowing?

by Pragmatist | 17th Dec 19, 8:59pm 1576569583

by Jock Silver | 6th Jun 18, 3:12pm 1528254737

Always go floating if you can pay down more per week.

Failing that, negotiate to secure a clause that enables you to pay a lump sum off your fixed term every 6 months, then save like hell and pay off quicker.

They say rent money is dead money. Paying interest to the bank is the same.

by gingerninja | 6th Jun 18, 10:49pm 1528282190

Offset mortgages offer you the benefit of reducing interest term but still leaving you access to your money if you need it for some other reason.

by kane02 | 6th Jun 18, 11:37am 1528241871

beware, these guys are fair weather friends. during the gfc hsbc wanted to exit the residential mortgage market so held interest rates high, forcing customers to refinance elsewhere. Now appear to have had a change of heart. I've head a few horror stories.

by gingerninja | 6th Jun 18, 12:21pm 1528244514

Who cares if they are a fair weather friend at 3.85% ???

Enjoy the low rate for 18 months and then move elsewhere having saved yourself a nice chunk of change.

by solardb | 6th Jun 18, 12:30pm 1528245041

And possibly get paid by the new bank for doing so .
My question is , as this is not available to existing customers unless they borrow more , what happens at the end of the 18 months ?.Are you then an "existing customer" , and have to go back to standard rates, or do you qualify for whatever special rate replaces it ?

by gingerninja | 6th Jun 18, 12:37pm 1528245452

I always find threatening to walk away and taking my business elsewhere is remarkably effective in achieving the best available rates ;-)

by President of P… | 6th Jun 18, 1:47pm 1528249656

I agree, nothing like mentioning that surely there must be some sort of a customer retention policy somewhere into the conversation...
President of Property

by kane02 | 6th Jun 18, 8:08pm 1528272514

All well and good provided the market stays liquid. All bets are off if rates go sky high and the big 4 close rank taking away your ability to shop around. HSBC were 9%, prior to the rbnz wholesale rates cut. They then held fixed rates artificially high locking customers in. Good luck on your $1m mortgage.

by Chessmaster | 6th Jun 18, 1:56pm 1528250180

How long have I been saying to expect sub 4% interest rates. So much for the doom and gloom merchants to say interest rates going up, house prices crashing. The fact is money is getting cheaper so we can expect these rates for a long time.

by theglc | 6th Jun 18, 2:27pm 1528252041

Its only because they are scrapping for good risk customers to lend to, and in this low volume market there may not be many that meet their requirements.

Interest rates will soon go up and it will be out of the control of the RBNZ.

by Chessmaster | 6th Jun 18, 2:53pm 1528253582

When is soon? Do you guys ever give up even when presented with a real facts like this HSBC deal? The banks are in the business of lending, they can't make money if they don't lend. They have eliminated the high risk developers and good developers also struggling to get funding. They can only lend for existing houses then. The supply side is getting absolutely constrained now other than this dumb Kiwibuild. Anyone with good job and 20% deposit will have no trouble getting funding right now for existing houses.

by Small Kev | 6th Jun 18, 2:01pm 1528250471

Only just the beginning.

by Penfold | 6th Jun 18, 5:02pm 1528261331

Um, I'm on 3.79% with HSBC, since about 18 months ago.

I don't think your correct saying "This is the lowest rate we have seen in the New Zealand market for more than 50 years".

by solardb | 6th Jun 18, 5:51pm 1528264281

Lowest advertised rate, you can pretty well always negotiate a lower rate. Usually just asking gets 0.1% or so .

by Penfold | 7th Jun 18, 12:00pm 1528329605

No. The 3.79% was the advertised rate. Exactly same as above.

I couldn't negotiate my way out of a paper bag.

by THE MAN 2 | 6th Jun 18, 5:45pm 1528263955

Bw, you do buy property below market value.
It is the only way to buy property!
When you pay less for a property that what it is truely worth, that is buying under market value!
Do it every time we buy property, but can not divulge how we do it!

by Houseworks | 6th Jun 18, 8:43pm 1528274630

TM2 as a lot of property is sold via auction, apart from making a pre-auction offer, in your opinion is it possible to buy below true value under the hammer? I say yes

by THE MAN 2 | 6th Jun 18, 9:20pm 1528276840

You are correct!
When you know the market and you have no competition, you can buy property well under true market value, as people that go to auction, tend to want to sell on the day!
Bought many sight unseen and never fallen on my face yet, due to knowledge.

by Houseworks | 6th Jun 18, 9:39pm 1528277997

Lol. I think it used to be almost impossible to buy sight unseen without massive risk. The internet has changed that :) and asking a few pertinent questions. We even had competition but still bought well! Ps DGMs, it was a commercial property

by Chessmaster | 6th Jun 18, 9:48pm 1528278537

Not if you know the area properly. The biggest gain on a single property I ever made was house unseen just saw section and house from Google Earth from the internet in Mt Eden (wasn't on the market). I knew the area was going to go gang-busters one day due to proximity to city and good schools. Made a killings but kicking myself for selling in 2016. Prices are still going up there and finding difficult to get a good property on a decent size section in that area now.

by THE MAN 2 | 6th Jun 18, 10:18pm 1528280327

As long as you know property then there are opportunity galore.
It is not rocket science you just have to be prepared to take a punt and when you are buying with positive returns and know you can get the money, it is a no brainer!

by Nic Johnson | 6th Jun 18, 11:04pm 1528283089

On the Barfoot and Thompson page where the losses since last March have been 8.9% from peak - a 'no brainer' would be anyone who had bought into the bubble since then..... But I guess you'd have to be heavily committed or as you say THE MAN 2 ' a no brainer' to still want to promote that and keep gearing yourself up.... ..

by Nic Johnson | 6th Jun 18, 11:10pm 1528283411

'due to knowledge' 'never fallen on your face yet'.... a two year olds hands will go out in front of them so they don't fall on their face......................... But I wouldn't ask a 2 year old for investment advice.... nor would I ask you THE MAN #"2.0... (that means 2).... Now ask yourself if you want to carry on posting idiocy of just disappear quietly into the ignorance???? I've been nice so far...

by Squishy | 6th Jun 18, 7:02pm 1528268521

HSBC show exactly the way a single product bank retailing an increasingly commoditised product should operate - no branches or ATM networks, don't waste money on vanity projects (sponsoring bowles clubs or startup incubators), don't service customers with small portfolios as you'll end up incuring the same service costs to collect less revenue. Focus on just one thing (value lending in the case of HSBC Bank) and do it very well, be obsessive about a single core product. New Zealand banks should consider their business model.

by JimboJones | 6th Jun 18, 9:18pm 1528276698

Agreed - although I’m not sure about the stability of a bank that only lends to people with more than half a mil of debt.

by gingerninja | 6th Jun 18, 10:54pm 1528282465

The last bank in NZ whose stability I would worry about would be HSBC.

by Nic Johnson | 6th Jun 18, 11:34pm 1528284861

'Don't ever worry about HSBC ,,,, they'll lend over half a mill of debt providing you have twice that much in assets if the shit hits the fan..... If you are a good prospect, they'll treat you very well and cherry pick you as a customer... I have benefitted from being with them for over 20 years... no complaints.

by THE MAN 2 | 6th Jun 18, 10:15pm 1528280151

Nic Johnson, why has your BS comment been deleted from this thread???????

by Nic Johnson | 6th Jun 18, 11:00pm 1528282831

Dear George.. Nothing I have written has ever been deleted... I see you are still running around the sand dunes finding something high enough to pee against..... Would you care to join me on the Barfoot and Thompson 8.9% crash page where I have been awaiting your response, worthy or otherwise???

by THE MAN 2 | 7th Jun 18, 10:52am 1528325549

Nic Johnson, where is your posting where you told the porky about the mortgagee sale?????
Someone has deleted it maybe because they know you don’t tell the truth.

by Nic Johnson | 7th Jun 18, 11:23am 1528327433

Its still there 'George Gregan' THE MAN 2.. you're just on the wrong thread, not the first time though eh?. Do you really want to go back there, because I didn't think you came across as being particularly bright, having just re-read it again.
Why is this one auction failure bothering you so much? Have you seen todays story on Auction results from B & T. They had a high court auction that failed there last week too... Which means no bid near the level of the mortgage, in case it needs explaining. These will not be isolated events George... There will be loads of them in the months ahead as the specu-debtors that have to sell the family home realise that there are very few buyers prepared to pay last years prices for their silly decisions

by Alter Ego | 7th Jun 18, 11:34am 1528328053

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12…

Arise all you people, A rise. Pride comes before a fall.