HSBC offers 4.25% for one and two-year mortgage terms

HSBC has launched what it terms “another market-leading” home loan offer of 4.25% p.a. for its 1 and 2 year fixed-term residential mortgages in New Zealand. The offer commences Monday, 12 October and closes on Friday, 30 October.

These “special” home loan rates are being offered for a strictly limited time to new and existing HSBC Premier customers.

“We are pleased to be able to offer this exceptional home loan rate of 4.25% p.a. for one and two years fixed, and continue to pass on the benefit of the current low interest rate environment to our customers,” said Glen Tonks, Head of Retail Banking and Wealth Management at HSBC New Zealand.

“In addition to unrivalled global online banking connectivity, the HSBC Premier offering in New Zealand is all about providing personal support for our customers’ personal economy. We achieve this via our dedicated relationship manager model and also by consistently providing highly-competitive home loan interest rates,” he added.

HSBC Premier is HSBC’s global personal banking proposition operating in more than 30 countries. In New Zealand, every HSBC Premier customer has a dedicated local relationship manager. Additional benefits include no fees at ATMs of any bank in New Zealand, commission-free foreign currency exchange at any HSBC branch worldwide, and the ability to transfer money internationally between your own HSBC accounts free of charge in as little as 30 seconds.

An individual can qualify to become an HSBC Premier customer either via a minimum combined home loan of NZD500,000 or NZD100,000 in savings and investments with HSBC.

The move from HSBC comes amid another flurry of activity from major banks.

ASB has cut some rates, with two of them to market-leading levels.

In fact, their new six month ‘special’ is now the lowest in the market for that term at 4.85%.

And their new eighteen months ‘special’ rate at 4.49% is also the market-lowest.

They have also reduced their two year ‘special’ rate to 4.49%. This rate matches the offers for that term from Westpac, HSBC and TSB Bank.

ASB already had an all-time low one year ‘special’ rate of 4.35%, which matches the same rate offered by BNZ.

These cuts follow reductions be Westpac on Friday.

ASB already had the lowest five year rate at 5.09%.

The advantage over ANZ is now quite striking.

Recent movements in wholesale rates have been trending down.

In fact 2 year swap rates are at their lowest level since late 2012, while two year fixed mortgage rates are at their all-time lows. Credit spreads are now much lower than during the GFC which allows banks to hold their margins at lower retail rate offers.

Borrowers should always negotiate for lower than carded rates, especially if you have equity of 20% or greater.

Talking to your bank’s main rivals and knowing what they will offer is the best way to start negotiations with your bank.

See all banks advertised, or carded, residential mortgage rates here.

These new fixed mortgage rates now compare across all banks as follows:

below 80% LVR 6 mths  1 yr  18mth  2 yrs   3 yrs   5 yrs 
    % % % % %
5.19 4.49 5.09 4.65 5.25 5.49
ASB 4.85 4.35 4.49 4.49 4.79 5.09
4.99 4.35   4.39 5.19 5.35
Kiwibank 5.19 4.49   4.59 4.85 5.35
Westpac 5.39 4.99 5.15 4.49 5.19 5.65
5.19 4.49 4.59 4.59 4.85 5.35
HSBC 5.39 4.25   4.25 4.99 5.29

4.99 4.49 4.69 4.55 4.79 5.29
5.29 4.55 4.69 4.49 4.79 5.50