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HSBC pushed fixed home loan rate offers lower yet again, with some market-leading low levels for their Premier product. They have cut TD rates as well. Meanwhile other banks are offering cashbacks more liberally

HSBC pushed fixed home loan rate offers lower yet again, with some market-leading low levels for their Premier product. They have cut TD rates as well. Meanwhile other banks are offering cashbacks more liberally

HSBC has today pushed fixed mortgage rates lower.

They have reduced their Premier fixed mortgage rates, with the one year rate falling -20 bps to 2.25%, their eighteen month fixed rate falling to the same 2.25% ( a -30 bps reduction)) and their two year fixed rate is down -25 bps to 2.35%.

Their new one year rate however is still above the 1.99% one year offer from Heartland Bank, but it is lower than any other bank.

HSBC Premier 18 month and two year rates are now market leading for each of those terms.

At these new levels, HSBC Premier has a 24 bps advantage over all the main banks, and this is enough to get the attention of borrowers, especially borrowers with strong financials.

For example, a borrower with a $500,000 loan (and in the Auckland market, that is not an unusual level), the savings are fairly modest. Assuming the alternative is a low 2.49%, that means a borrower will save $62 per month, taking their monthly repayment obligation down from $1973 to $1911. For weekly repayments, the drop is -$14, from $455 to $441.

HSBC Premier qualification criteria applies (that is, combined lending of $500,000 or more, or $100,000 of savings and investments with HSBC).

As interest rates fall, the reduction in mortgage payments becomes less and less material for most household budgets. Still, over the life of the 30 year loan, that is about a $22,000 interest saving and still worth having

Earlier this week, TSB cut their 18 month and two year rate to 2.49% and matching their one year rate and these rates are also low compared to the main banks.

TSB also offers a substantial cashback for qualifying borrowers. Generally, cashbacks of between 0.6%-0.8% are also available from the main retail banks. Mortgage lending is one of the only sectors where banks are seeing rising loan demand and there is a scramble to hoover up as much share as possible in the current market. But there is no cashback offer from HSBC however.

At the same time, HSBC has reduced all its term deposit rates. These were already market lows but the new levels are very low indeed - 0.60% pa for any term 6 months to five years for a $10,000 deposit, 0.80% for a $100,000 minimum deposit.

One useful way to make sense of these new lower home loan rates is to use our full-function mortgage calculators.

And if you already have a fixed term mortgage that is not up for renewal at this time, our break fee calculator may help you assess your options.

Here is the updated snapshot of the lowest advertised fixed-term mortgage rates on offer from the key retail banks at this time.

Fixed, below 80% LVR 6 mths   1 yr   18 mth  2 yrs   3 yrs  4 yrs  5 yrs 
as at November 6, 2020 % % % % % % %
               
ANZ 3.39 2.49 2.55 2.69 2.79 3.90 3.99
ASB 3.39 2.55 2.49 2.69 2.79 2.99 2.99
3.39 2.55 2.49 2.69 2.79 2.99 2.99
Kiwibank 3.55 2.49   2.65 2.65 3.09 3.19
Westpac 4.15 2.49 3.25 2.69 2.79 2.99 2.99
               
Bank of China  3.45 2.55 2.65 2.65 2.75 2.85 2.95
China Construction Bank 4.70 2.65 2.65 2.65 2.80 2.89 2.99
Co-operative Bank 2.49 2.49 2.49 2.69 2.79 2.89 2.99
Heartland Bank   1.99   2.35 2.45    
HSBC 2.79 2.25 2.25 2.35 2.65 2.79 2.89
ICBC  2.95 2.95 2.60 2.65 2.65 2.89 2.99
 SBS Bank 3.39 2.49 2.49 2.65 2.75 2.99 2.99
 [incl Price Match Promise]  2.89 2.49 2.49 2.49 2.79 2.99 2.99

In addition to the above table, BNZ has a unique fixed seven year rate of 5.20%.

Fixed mortgage rates

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30 Comments

That's nothing yet, wait till end of April 2021, rates will be at 1.50%

And then how do you expect house prices to remain high once they hit < then 1%?

I'm not sure if you're being serious with your question? Just in case you are, house prices will rise as interest rates fall, if then interest rates stay at record low levels, house prices will remain at record highs...

House prices can only remain 'High' if interest rates continue to fall. So when they go below <1% there's not much room for price debt gain is there.
That's the problem with relying on property prices increase through mass debt. But I'm guessing that won't sink in with you until we're actually there.

40 year terms. 50 year terms. Interest-only second mortgages on 20% of the value, 30% of the value, 40% of the value...

Yes they could even adopt the Japanese mortgage method of getting your children to take on the mortgage burden when they start working. But then again look what happened to them, economic stagnation.

Imagine a theoretical interest-only mortgage when interest rates are 0%. You wouldn't even need an income to service that debt.
The only barrier would be the $500K - $1M+ deposit required. Maybe we'll need deposit loans paid over 30 years...

Didn't Donald try something like that? I guess we could all try to be Real Estate Mobsters but it hasn't worked out well for him so far with his debts spiraling out of control. Forbs article: Donald Trump Has At Least $1 Billion In Debt, More Than Twice The Amount He Suggested. https://www.forbes.com/sites/danalexander/2020/10/16/donald-trump-has-at...

But are they importing their popualtion, to grow their population and increase demand for housing, like NZ and Australia is? Australia has similar problems to NZ, but not as bad, but at least they have CGT and other taxes around property, and their bubble isn't as bad as NZ. They are only seen as having the second biggest property bubble, NZ is seen as the biggest.

"House prices can only remain 'High' if interest rates continue to fall"

That's where you're going wrong, re-read my post

Another round of interest rate cuts will energise the already wealthy to capitalise the discounted present value of perceived future cash flows.associated with residential property assets.

Nonetheless, locally the NZ 10 year government bond yield at 0.51% and globally weak energy prices suggest these cash flows could be exposed to downward correction risk no matter how low interest rates fall.

My two cents if you have a roll over. Push your bank for a decent 6mth rate (2.4 or better). At the moment Banks arent competing on rate as they are hitting capacity constraints. Come Feb/March, major banks will be under 2, regardless of a cut from the RBNZ

"Substantial" for TSB is up to $4000 for a loan of $700k, which is a substantial loan.

The main benefits of the lower loan rates is the ability for existing borrowers to keep their payments the same, paying them down faster, which would save much more than just accepting the minimum payment from the lower rate.

Only if they can get the rates, and are not locked into a long term fixed rate. But if they are buying to upgrade, they will likely be paying more for their new home.

Still, I imagine that 0.60%-0.70% cash is better than a 0.24% discount for 1 year.... easy maths really. Just use the cash to increase your payments.

This is what I have been waiting for. Don't settle until early December so lets hope the rates drop a bit in the next month :)

I have seen people confirm on FB groups about getting 2.35 from BNZ. So, the arets have gone done but just not advertised yet. so HSBC has 0.1 % discount.

Friend has been offered 2.45 for 12/24 months, 2.39 for 18 months, that was on well over 700k though. Plus $6500 cash back.

The cash back is part of his deposit, its a racket!

with no cash and widely reported sub-par service

This has obviously been in the pipeline for a while. HSBC quoted me these exact rates two weeks ago.

Whenever I see the announcement that interest rates have dropped again to record low levels, it just means house price are again going to jump in price. Allows people to be able to pay more to buy a house.

We will get to the point very soon , where any tenant with a job, can buy a house. Rents will drop as vacancy rates rise

Makes sense. Fiat is worthless.

It is worthless but you're not going to be getting paid any more of it for your human labour.

Did you know with Fiat, you can get both adults working for ever and a day with a miniscule deposit and get some other total 5 grand crumb to get you to do it so you can thank your banker for the priviledge of a life time of servitude.

Some people think this is making money. It is just papering over the true reality of Work.

Some people should think things through for the next 40-50years and ask themselves daily, just why would a Bank want another serf.

Freedom is just another word for nothing else to lose......plus interest, rates, insurance, decoration, detiroration, wet rot, gardening, overlooked by those on the boundaries, getting ever closer. Yuk... Tied to a Bank...stuff that.

Should I leverage 100k @ 2% for Bitcoin. Im up 35% in 3 months so far!!

Sure, why not.

Apparently bitcoin follows an amazing pattern of doubling every... something or other. Surely you can't lose. < /s>

ba hahaha!!