HSBC cuts three home loan rate offers with some new 3.95% 'specials', restoring its market-leading positions after others had moved to challenge it

HSBC has launched some "summer specials", pricing them at 3.95%.

These apply to their one, two and three year fixed terms.

They represent a trim of -4 bps for one, -24 bps for two years, and a more substantial cut of -74 bps for three years.

HSBC Premier rates have been the market leader for low rates for a long time. But recently others including Kiwibank and Westpac have been offering sub-4% rates as well, matching their standard Premier rates at 3.99%.

Today's move restores their market-leading position, and widens it.

This change is effective today (Friday) and are described by the banks as "being offered for a strictly limited time to new HSBC Premier customers, and existing HSBC Premier customers who borrow an additional $100,000 or more".

HSBC however has not changed its 3.99% eighteen month offer.

An individual can qualify to become an HSBC Premier customer either via a minimum combined home loan of $500,000, or $100,000 in savings and investments with HSBC New Zealand.

Today's change comes after the Co-operative Bank lower some rates yesterday too, also achieving market-leading positions for other terms.

Update: Today (Monday), Kiwibank ended its 2 year 3.99% 'special', reverting to 4.19%.

Today's changes also come as wholesale rates dipped significantly lower yesterday, reaching record all-time low levels for most durations less than ten years.

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

Here is the full snapshot of the advertised 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 February 8, 2019 % % % % % % %
ANZ 4.99 4.05 4.19 4.29 4.49 5.55 5.69
ASB 4.95 4.05 4.19 4.29 4.49 4.95 5.09
4.99 4.10 4.79 4.29 4.49 5.19 5.39
Kiwibank 4.99 4.05   4.19 4.49 4.99 5.09
Westpac 4.99 3.99 4.09 4.29 4.59 5.29 5.49
4.05 4.05 4.29 4.29 4.49 4.89 4.99
HSBC 4.85 3.95 3.99 3.95 3.95 4.99 5.29
HSBC 4.99 4.05 4.49 4.29 4.49 4.99 5.09
4.85 4.05 4.19 4.25 4.49 4.95 4.99

In addition to the above table, BNZ has a fixed seven year rate of 5.95%. TSB no longer has a 10 year offer.

Fixed mortgage rates

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The differences between the banks is not worth worrying about. I know someone at the ANZ who just got 2 years pre- approved at 3.99% starting in a couple of months time. House prices are never going to "Crash" with rates on offer like this. Joe Public is now getting used to this continued low level of interest rate, especially with the banks signaling its here for years to come.Great news for home owners, use it to smash your level of debt.

"Joe Public is now getting used to this continued low level of interest rate" the problem. (And yes, they are going much lower)

(If you were a lender, would you prefer to lend out all you could at 4% or 10%? There's what's going to happen in a nutshell - lenders are going to ration what lending they 'have' to do to maintain stability. The days of overexuberant lending - are over.)

Problem? If it's a problem for you bw, feel free to pay the banks 5% or 10%, I'm sure they won't mind

Feel free to pay the banks 3% for, (if they're assessing loans for credit worthiness at a notional 7.5% or thereabouts) - nothing!

Nothing for you maybe, not for me, I was cashflow positive ten years ago when interest rates were 8.5%

But it's not you, as an individual, that sets the prices in the overall market. Most people, looking to either enter or refinance in today's market aren't 8.5% cashflow positive. That's why interest rates are falling ( an will further). Not to entice more borrowers into the market (tight) but to keep their current borrowers solvent. Oh, and here's what's coming to NZ, and everywhere else that's 'overdone it'

"REA Group's first-half profit has fallen 98 per cent ..."

Now there's all sorts of reasons and excuse for that ( see story) but 98% fall? Nasty!

That 98% drop isn't that significant if it is because of being hit by a big goodwill impairment against REA Group's Asian unit for 170 odd million.


The boomers love to go on about 20% interest rates back in the day. They might describe these rates are exorbitant or usury. But house prices were a fraction of what they are now.

But it's no different now? The banks are still taking a huge chunk of people's incomes. 4% on a house 10x your income is the same as 20% interest on a house 2x your income. But at least at 20% interest it was much much easier to save for a house.

Great comment. Also, interest rates were high to combat high inflation which ate away at the value of their loans making it easier to pay off faster.

Yes, the real interest rate is the interest rate minus inflation.
At some points inflation was so high it was a negative real rate.

Why did Boomers even need to take out mortgages? Could they not save? House prices back then were the same multiples of income as a house deposit today, you don't hear of many people taking out mortgages for house deposits!

Smashed avocados? Fondue?

Beautiful, music to my ears, looks like interest rates starting with a 3 are slowly becoming not so "special" anymore but rather more main mainstream : )

It should terrify you actually! Low rates mean lending is tight - see above. High rate means its easy.
The lower rates go, the less lending there will be. What happens to asset prices then?

Don't be such a drag bw, life is wonderful!

It sure is! Those who saw what is coming, and had the courage to prepare are going to bask in the sunshine of life. Those who denied the inevitable....well.....

(Personal insult deleted, Ed).

I too have images of the Weevil frothing at the mouth.

Have a wonderful weekend folks : )

(Personal insult deleted. Time for a commenting holiday for you after a spate of recent personal insults. Our commenting policy is here - Ed).

PP2F, if you're Ed, why did you delete your own comments at 11:16 for insults? LOL

The stress of being wrong for 8.5 years has taken it's toll on PP2F.

"Low rates mean lending is tight "

You will need to explain that to me please.

See mine at 11.03 am & 11.08 am above.

You reasoning does not make sense. It's like saying "whitebait at $1 a kilo shows there is an under supply"?????

Low rates means the banks have excess capacity to lend = lending is loose.

Low rates means the banks have excess capacity to lend = lending is loose.

Don't agree. Theoretically you're right but only on 1 dimension. The low interest rate translates into cheaper debt, thereby trying to encourage people to borrow more. However, if the conditions req'd for borrowers are becoming more strict, then that suggests that lenders are bcoming less tolerant to risk. There is a trade off for the lender.

Assumptive - just because the price is low and supply is plentiful does not mean that lending is loose. The issue becomes can the borrowers make the payments or perhaps do the borrowers want to take on the responsibility . What criteria are the bank using to determine to whom they lend - are the much tighter than they were before so fewer people are able to borrow.. Are the banks less interested in new borrowers and more interested in poaching other banks existing borrowers. Lots of questions with not to many answers.

Low rates mean the cost of funds is low, it doesnt specifically comment on the availability of funding like it use to.

Sure, why not make the debt bubble even bigger. Who cares about those people taking big mortgages at this late stage of the cycle. At least there’ll be affordability after the bust, and people with money on the sidelines will be able to buy mortgagee sales at the bottom of the market. Just hope a bank doesn’t have to be bailed out or bailed-in this time...

Everyone should be grown up and manage their own risk. Bail outs are political and punish taxpayers for the bad decisions of investors or consumers. Canterbury Finance and AMI are examples of taxpayers footing the bill for idiots who made bad decisions.

For those who are waiting for a crash before they strike best of luck to you. Just don't hate on those gobbling up houses in the current market.

Very well said HG

"South Canterbury FInance". Furthermore, the "idiots" you refer to included many wealthy South Islanders. One of the reasons why SCF was bailed out was the negative effects it may have had on the rural economies. Now if you compare that with the "idiots" who invested in Blue Chip (safe as houses), the profile of that investor was a little different. Urban and probably less influential on their respective local economies.

Easy to see why SCF investors received preferential treatment. Not saying that I agree with it, but that's the way politics works.

For those who are waiting for a crash before they strike best of luck to you. Just don't hate on those gobbling up houses in the current market.

OK, I'll remove myself from the market and let you gobble up as many houses as you please. Be my guest.

HeavyG and Yvil. I would venture that interest rates can't rise as we are at affordibility limits. Looking at it that way and knowing that we need an ever increasing money supply in our economy then rates can only go down. Logic applies that they can't go down forever and when they can't go down anymore we have a crash. It's just the path we are on (if there's no external shock which hastens a correction/crash).

Agreed with the first part of your post. When it comes to logic, I don't think it applies to the markets very often

True about logic although we will be forced into some uncomfortable truths at some stage. I just hope we don’t turn to the Japanese path when we do.

considering the possibilities 30years of stagnation isnt so bad, of course the Govn debt at 200+% GDP isnt going to fly, its default at some stage.

HeavyG and Yvil. I would venture that interest rates can't rise as we are at affordibility limits.

As HeavyG noted, everyone should be grown up and manage their own risk.

Investors should have no expectation nor demands to be protected from interest rate increases over time. Bill English was sensible enough to point such out.

I wish it was that simple. I guess our housing market is too big to fail now realistically.

HG, I’m not hating on people buying at this stage of a bubble, just trying to flag it as very likely that it’s coming to an end, if people don’t know yet. The banks aren’t going to say so, and not even the RBNZ until it’s too late I’d say. It’s more inexperienced first home buyers I’m thinking of. If experienced investors are buying into the later stages of a bubble, good luck to them. Just know that it’s been similar in Sydney and Melbourne and some parts of Sydney are now down over -20% and no sign of a turnaround. Those who bought in the past 18 months or so are well into negativity equity already.

AMI isnt really in the same leauge as CF. They had quite reasonable models and simply the fault was not known about.

Bust? what bust?

I would suggest their is not alot of discretionary borrowing going on . I.e the rates are low , lets go buy a house.
There may be some on the edge of affordability that the lower rates mean they can now buy , but I don't think low rates will kick of a buying spree.

As long as everyone accepts low rates are more likely to encourage home buying than high rates? Furthermore, existing home owners will be more able to hold property (perhaps in the hope of a future capital gain) if they pay lower rates.

I just get the impression from the DGMers that high rates = property crash, low rates = property crash, rates unchanged = property crash.

Again a one dimensional argument that interest rates are the only factor which affect peoples willingness or ability to borrow (you could almost argue it's back and white thinking). .

Let's just completely disregard the powerful unseen Jedi force of sentiment.

Depends what rate banks are stress testing new buyers at, surely.

Banks may also be competing for the best looking current owners, rather than just new buyers.

Banks are also looking at actual income and expenses. This disqualifies a lot of people (who could not afford to pay a mortgage anyway - the ones that end up as a mortgagee sale after 2 years).

I don't see lending being anything but tight for the foreseeable future.

HeavyG, you couldn't get everyone on here to agree the sky is blue. The DGMs can only see grey clouds for starters....with interest rates this low, home owners have never had it better.

HeavyG, you couldn't get everyone on here to agree the sky is blue. The DGMs can only see grey clouds for starters....with interest rates this low, home owners have never had it better.

Low interest rates might be OK to repay the cost of debt. It doesn't mean "home owners have never had it better." Do you think Japan would prefer a higher cash rate or a lower rate? Best to think about the reasons why the cash rate is so low.

Actually there are several problems with your statement. Firstly your comment about the colour of the sky - some people are colour blind

additionally there are those (mainly female I believe) who are able to detect very subtle various in colour which most people do not notice.

Additionally only home owners with mortgages will have "it better". But is that those with existing mortgages - what about those trying to become "home owners" - what I am saying it depends on where you are in the "life" of your mortgage - just starting, middle or end.

Well it means aspiring first home buyers can afford to borrow more debt for the same servicing costs, so suuuuurely that’s a good thing right? Like being able to put an extra couple of litres of petrol into your tank for the same $100.

Except you may have bought a hummer that you can’t afford to run if gas prices return to long term averages

But surely the government will do everything in its power to keep petrol costs low so that hummer drivers can continue to use their vehicles? Same with mortgage interest rates, who cares about the value of the currency we need to keep people paying mortgages.

Not the same thing.......

Nice sarcasm :)

Even at $2.05 a litre that has to be painful, and here's me looking at an ioniq and $250 a year...let alone a week...

As “The Man” has said numerous times, Interest rates are going to be around these current levels for a very long time.
If I was a first home buyer I would be seriously looking now, and be taking advantage of the fact that many investors are sitting on the sideline waiting to see what happens with this nil Coalition government policies.
Capital Gains are a dead duck just like KiwiBore.
Jacinda trying to blame the global world for a potential slowdown, when most intelligent people know it is possible due to the government not stimulating the business community.
Have several fixed rate mortgages due up next month and Bank has already offered me the new rate I could have!
Will be saving just over $10k per year so not a bad payrise I suppose.

We have to admit, THE MAN 2 called it!

Are you able to explain what you mean by government stimulating the business community. Does that require an ex banker PM to b(w)ank off current bankers, so that in the future he can return to the bank and continue to be a banker?

Because that sure sounds stimulating for all involved.

TM2 - do you believe in a business cycle? Or can we have continuous credit expansion forever without restriction?

Credit expansion forever. Basically many countries are broke, they just keep kicking the can down the road and carry on as normal.I don't see anything changing and by the time it does, there will be bigger things to worry about anyway. Nobody really knows how the effects of climate change is going to pan out. This only needs to turn into some irreversible exponential change......

So the business cycle doesn't exist because of climate change? Just trying to make sense of your comment..

“Not my problem, I’ll be dead by the time anything bad happens so why worry just keep doing what we’re doing”

Your great great grandchildren thank you in advance for acting in your own self interests (Boomerfreude).

One more - what do you mean by stimulating the business community? How many times can you stimulate something before there's nothing left to stimulate?