HSBC launches a new low two year fixed home loan Premier offer, the first local bank to deeply discount a mortgage rate in 2020

HSBC launches a new low two year fixed home loan Premier offer, the first local bank to deeply discount a mortgage rate in 2020

Following some rising home loan rates from main banks recently, HSBC has reversed course and dropped a key fixed rate.

Its new Premier fixed rate for two years is 3.20%, down from 3.54%.

No other HSBC rate has changed at this time.

This special home loan rate is being offered "for a limited time" to new HSBC Premier customers, and existing HSBC Premier customers who borrow an additional $100,000 or more.

HSBC Premier qualification, minimum deposit and equity criteria apply. Those qualification conditions include a minimum value of $500,000 in home loans with HSBC in New Zealand (facility limit not outstanding balance); and/or a minimum value of $100,000 in savings and investments with HSBC in New Zealand; and/or if you are an overseas HSBC Premier customer you will automatically qualify for Premier customer status in New Zealand. They confirm that equity of at least 20% is also required.

HSBC's 3.20% rate is not the lowest mortgage rate offer in New Zealand. China Construction Bank offers 3.15% and 3.19% for various fixed terms, and ICBC offers 3.18% for various terms.

Wholesale swap rates had started rising in early December which resulted in some banks raising some fixed home loan rates. But in the last week of January these rates started falling, and quite quickly. They are now in fact lower than where they started in mid November 2019.

And all banks are predominately funded by customer deposits. Those rates didn't really move over this period either up or down, although ANZ did raise some key term deposit rates recently.

But HSBC is different to many other banks offering mortgages in New Zealand. It is not a locally incorporated bank subsidiary; rather it is a branch of the Hong Kong bank and as such it benefits from a broader and more diverse range of funding options.

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

Fixed, below 80% LVR 6 mths  1 yr  18 mth  2 yrs   3 yrs  4 yrs  5 yrs 
as at February 14, 2020 % % % % % % %
               
ANZ 3.65 3.45 3.49 3.65 3.99 4.75 4.85
ASB 3.89 3.39 3.75 3.55 3.89 4.19 4.29
4.79 3.49 3.39 3.55 3.89 4.09 4.19
Kiwibank 4.29 3.45   3.55 3.89 3.99 4.09
Westpac 4.79 3.39 4.25 3.55 3.99 4.35 4.45
               
Bank of China 5.15 5.25   5.35 5.50 5.70 5.99
Co-operative Bank 3.49 3.49 3.59 3.59 3.89 3.99 4.09
China Construction Bank 4.70 3.15   3.15 3.19 3.30 3.45
ICBC 4.29 3.18 3.18 3.18 3.20 3.99 3.99
HSBC 4.19 3.54 3.54 3.20 3.69 3.79 3.89
HSBC 4.29 3.39 3.69 3.55 3.89 4.49 4.49
  3.89 3.39 3.55 3.55 3.89 4.45 4.55
Price Match Promise     3.39     4.09 4.19

In addition to the above table, BNZ has a unique fixed seven year rate of 5.70%.

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WOW, caramba!

Chances are that this low rate will further stimulate the housing market - at a time where there’s a shortage of listings.

TTP

guess you will be rushing out to borrow money then?

Yawn.

Much more interesting would be what the big banks are actually offering, both in terms of rates and their serviceability tests. I reckon the nominal low rates from banks with a "C" in them and tiny market share don't make much of a difference to anything.

well, from the table ICBC provides this offer for 3 years , and better offer for 1, 1.5 and 2 years

What's the rate going to jump to after 2 years ?

3.21%

Beware HSBC... the special rates are only ever for new loans. There is a reason they don’t ever manage to grow much despite low teaser rates

It pays to read the article before making comments:

"This special home loan rate is being offered to new HSBC Premier customers, and existing HSBC Premier customers"

Were you trying to be intentionally misleading?

"existing HSBC Premier customers who borrow an additional $100,000 or more". The additional borrowing being key point here. At rollover, you dso NOT get the rate,unless you want to (and they approve you to) borrow $100,000 more.

Boom Time..........interest rates to home buyers to fall below 3%. House price to go up by 20% Plus . Average Median in Auckland to Touch 1.2 or 1.3 Million. Leave eveything and buy House and Stocks and borrow as much as possible :)

One day the music stops...

Janet Yellen cured the business cycle. Not another crash in our lifetime. One way train to wealth and prosperity for all on board.

Yes indeed, I'm loving this recessionless utopia of perpetually inflating asset prices. Who could possibly miss out and how could it possibly go wrong for debtors?

Its not that assets are becoming more valuable, its that money is rapidly becoming worthless

Relax, the CPI and Reserve Bank tell us there's only low inflation.

I think your right. I actually think a massive bout of (CPI) inflation will hit at some stage. Why bother growing 5c carrots on your $10 million dollars of land for example?

All the growth in asset prices has driven yields to nothing, and the growing cost of living as a result of housing don't give people heaps of extra money to buy carrots. Compared with getting a negative return on your money, 5c carrots sounds pretty great. Jyske bank in Denmark is already offering a negative interest on mortgages.

I think low inflation and in many areas deflation is actually on the menu.

The reason is that low rates and QE have created overcapacity globally. Every deal and startup has been funded, no matter how ridiculous.

If there is a huge bout of inflation, the debtors will be proven right. It makes sense to borrow now if prices are going to keep inflating, as the value of your debt diminishes.

Deflation on the other hand would be disastrous for debtors.

I hate these relentless self-promotion posts on the internet, not referring to you little put the post you put up'