HSBC has brought its mortgage rates down to record lows, and has announced a series of cuts to all of its fixed home loan rates.
The cuts mean it is now the only bank to offer every fixed-term rate at below 3%. Its one year fixed-term rate is significantly below other banks at 2.45%, with the nearest competitor being the 2.55% rate of ANZ, BNZ, Kiwibank, Westpac and others.
HSBC’s six month rate has fallen to 2.79%, and its 18 month, 2 year and 3 year rates are now 2.55%, 2.60% and 2.65% respectively.
Its 4 year rate has dropped to 2.79%, and its 5 year rate is now 2.89%.
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As with previous low interest rate offers, these new rates are only available to HSBC Premier customers. Premier can be accessed by customers who have met the following criteria:
- A minimum value of $500,000 in home loans with HSBC in New Zealand, and/or;
- A minimum value of $100,000 in savings and investments with HSBC in New Zealand, and/or;
- An overseas HSBC Premier customer will automatically qualify for HSBC Premier in New Zealand
The new rates are effective Tuesday 21 July.
Commenting on falling rates, economist Tony Alexander says we are likely to see more short-term rate cuts in the near future, though he says anyone looking for further significant falls would be “taking quite a gamble.”
“For short rates of 1-2 years, margins are better than for three years and more, but they are almost exactly on average,” Alexander said.
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“This suggests that if Spring mortgage campaigns do happen this year, banks are far more likely to discount the 1-2-year rates than longer rates.”
“This week the Reserve Bank released a special edition of a survey they usually run every six months, asking banks about their lending conditions, appetite for debt etc. across business, farming, and household sectors,” he added.
“For households, banks said that they anticipate a weakening of loan demand over the second half of this year due to worsening employment, and ending of special support measures.
“If [banks] are going to compete for business come Spring, it is far more likely to be via interest rate reductions than noticeable changes in lending criteria.”