HSBC has cut its market leading advertised mortgage rates lower.
It has announced on its website 'special' new carded rates for both one year fixed, and eighteen months fixed.
The new rate is the same for both terms and is 3.85%, a -14 basis points drop from the 3.99% rate that applied before, and which were already the lowest advertised rates in the market.
These rates apply to HSBC's Premier offer.
In June 2018, HSBC had its fixed 18 month rate at 3.85% for eight weeks before raising it to 3.99%. The 3.85% rate level is an all-time low for a bank, and at least a 50 year low.
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.
Meanwhile, there is a lot of activity in international wholesale benchmark interest rates. US benchmarks are rising, but so far those changes are not flowing through significantly to New Zealand wholesale rates.
From mid-June to mid-August, New Zealand two year swap rates fell -20 bps. This gave the room for the Spring real estate selling season reductions. Since mid-August, those same wholesale swap rates have move very little. And despite the big shifts that continued overnight, local swap rate markets have opened here virtually unchanged this morning.
With wholesale swap rates not moving much recently, the retail rate tightening of carded rates is more 'competitive' than cost driven.
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 October 5, 2018||%||%||%||%||%||%||%|
In addition to the above table, BNZ has a fixed seven year rate of 5.95%.
And TSB still has a 10-year fixed rate of 6.20%.