HSBC offers record low mortgage rate
HSBC bank has launched a record low home rate of 3.87 per cent — but those who take it up must borrow at least $500,000, or have investments worth more than $100,000.
The low rate is the latest offer from the bank which last year ran a special rate of 3.95 per cent — at that time New Zealand’s lowest residential mortgage rate in more than 50 years.
Chris Russell, HSBC’s chief executive in New Zealand, says it is launching the new rate to celebrate the bank’s 30 years of operating in the country.
The rate, for an 18-month fixed term, being offered for a limited time, and only to new HSBC premier customers and existing HSBC premier customers who borrow at least an additional $100,000.
An individual can qualify to become an HSBC premier customer either via a minimum combined home loan of $500,000 or through $100,000 in savings and investments with HSBC.
To qualify, customers have to provide an owner-occupied property as all or part of the security. The bank says minimum deposit and equity criteria will apply.
Massey University associate professor David Tripe does not expect other banks to rush to match the HSBC rate.
“HSBC, as I understand it, have good funding sources through their network . . . and they’re keen to get some loans out to some good customers.”
Tripe said that generally rates had stabilised but were expected to go up in the next 18 to 24 months.
“People are picking the Reserve Bank to push [up the] official cash rate late next year/early 2019, so that would all be consistent with that sort of outcome,” Tripe said.
Glen Tonks, head of retail banking and wealth management at HSBC New Zealand, said the rate was not a loss-leader and the bank was serious about growing its business.
Tonks said the bank had grown above the market rate this year with much of the growth coming from Auckland, despite a slowdown in the city’s housing market.
“The reality is many people have mortgages over half a million dollars.”