HSBC has launched a 3.95% mortgage rate.
This is the lowest rate since the 3% 'State Advances' loans of the 1950s and early 1960s.
It is only the second time since then that any rate has started with a '3'. (Those old SALs were discounted to get veterans of World War Two into housing and weren't exactly commercial.)
HSBC's rate trumps the SBS Bank 'special' that was available for a limited time in November 2015 which carded at 3.99%.
At 3.95%, this new HSBC rate is a 'special' and is the first time they have offered an 18 month fixed term.
This offer is for Premier customers and comes with those criteria requirements:
A minimum value of NZD500,000 in home loans with HSBC in New Zealand (facility limit not outstanding balance); and/or
A minimum value of NZD100,000 in savings and investments with HSBC in New Zealand; and/or
If you're an overseas HSBC Premier customer, you'll automatically qualify for Premier customer status in New Zealand
Note: Once you become a qualified HSBC Premier customer, minimum home loan values no longer apply, although other home lending criteria may still need to be met.
HSBC has also cut other rates, including is six month rate to 4.85%, its two year rate is down by -10 bps to 4.39%, its three year rate is also down by -40 bps to 4.59%, and its four year fixed rate is now 4.79%, down -20 bps.
That new 4.79% four year rate is also now at a market-leading level. HSBC also offer market leading rates for one and five year terms.
In a statement issued with the notice of rate changes, Glen Tonks, Head of Retail Banking and Wealth Management at HSBC in New Zealand said, "In these uncertain times we are pleased to be able to provide our customers with certainty over the short-to-medium term by offering this 3.95% p.a. 18-month fixed mortgage, the lowest rate in over 50 years”.
The opportunity for sub- 4% home loans has opened up quickly with the recent sharp fall in wholesale interest rates. These fell sharply last week. The scale of these cumulative falls has been impressive, although limiting bank options somewhat has been the recent run up in credit spreads. However, the net effect has been to lower wholesale money costs.
It is not such a stretch now for banks to pitch their carded rates under 4% and it seems likely that more will do it.
Despite the HSBC Premier criteria, today's move will pressure other banks as customers and prospects shift their sights when negotiating with banks. Borrowers with low LVRs and A grade financials will no doubt be the first to benefit from these new lower rates.
Anecdotal evidence suggests sub- 4% rates are being offered more often in individual negotiations.
Today, mortgage rates now compare across all banks as follows:
| below 80% LVR | 1 yr | 18mth | 2 yrs | 3 yrs | 4 yrs | 5 yrs |
| % | % | % | % | % | % | |
 |
4.39 | 4.95 | 4.49 | 5.10 | 5.25 | 5.35 |
 |
4.39 | 4.49 | 4.49 | 4.75 | 5.15 | 5.25 |
 |
4.39 | 5.09 | 4.39 | 4.49 | 5.40 | 5.50 |
 |
4.39 | 4.49 | 4.85 | 5.25 | 5.35 | |
 |
4.39 | 4.95 | 4.39 | 4.80 | 5.25 | 5.35 |
 |
4.39 | 4.39 | 4.49 | 4.75 | 4.99 | 5.15 |
 |
4.25 | 3.95 | 4.39 | 4.59 | 4.79 | 4.99 |
 |
4.35 | 4.35 | 4.35 | 4.65 | 5.29 | |
 |
4.35 | 4.69 | 4.29 | 4.79 | 5.35 | 5.35 |
In addition, BNZ has a fixed seven year rate of 5.90%, while TSB Bank offers a fixed ten year rate at 5.75%.
Fixed mortgage rates
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29 Comments
I wonder where HSBC ( HONG KONG SHANGHAI BANKING CORPORATION) sources its funding from ?
This is not information that is Publicly available , because the New Zealand operation is a Branch of the Hong-Kong registered Company , so we are totally in the dark .
You can be sure that its offshore funding costs are close to Zero, and the RBNZ 's tinkering with the OCR means Diddly-Squat to their operation .
They are sitting in those patent leather brogues on patent leather executive swivel chairs laughing at Wheeler
This is the only bank that will actually fund offshore buyers for NZ property , and they openly advertise it .
We should insist that ALL foreign owned banks trade here as locally Incorporated subsidiaries and PUBLSIH THEIR ACCOUNTS FOR THE LOCAL OPERATIONS HERE IN NZ
END OF STORY
Have you read their Disclosure Statements (required by RBNZ) here ?
Much of what you need to know is there. It is publicly available.
But no bank would ever fund New Zealand lending with unhedged funds. The process of swapping foreign funds to New Zealand dollars effectively prices their money with NZ [wholesale] interest rates. (That's how currency swaps work.)
It's a complete myth that you can 'borrow free money' somewhere offshore for use here. No one can do that; not a branch like HSBC, not even our government.
HSBC may be a branch of the Hong Kong bank opertaing here (like many other bank branches), but they are still subject to RBNZ regulation. There is no free pass.
You are quite wrong.
I am sure you are as quite right as I am quite wrong , but I still cant find a set of Financials for HSBC New Zealand operation that explains exactly how their funding model works
I am also sure they are subject to RBNZ oversight , and that they are clever enough to be compliant enough to get through the scrutiny.
The RBNZ will also be satisfied that the "head office " is also subject to both HK and ultimately UK regulatory oversight
That still does not detract from the suspicion that some of their funding may be unorthodox .
It has been quite unnecessary to hedge anything when you use what is borrowed monopoly money to buy real Kiwi $. and invest it here
The fact is that you can borrow New Zealand Dollars ( or any other dollars ) in Hong Kong or Shanghai and with the Chinese currency being kept low and forced lower , there is little risk to the borrower , the NZ $ debt is being deflated as the domestic Chinese currency weakens , As long as the Yuan goes down , the debt to be repaid goes down in tandem .
The same applies to the HK$ , if you borrowed HK $500 000 10 years ago and bought NZ$ , AT 2,5 :1 , you would only have to pay back half today because the exchange rate is over 5 :1
Then there are those who got their money out of China before the Renmimbi tanked , who are really laughing .
Of course there are risks , but HSBC has never shied away from risk
was interested to see the herald made yesterdays sale of A house on the shore for way above GV A top page story
it was mentioned that
" the house was bought by Chinese people who currently live in Auckland"
why was this even stated and what is the aim of that line
http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=115…
I think its nothing short of corrupt market manipulation.
I think media should be regulated. Even having Hoskings and Henry going on 'talking up their own book' is very very wrong. They are abusing their public position for their own selfish reasons.
The herald reporters, general reporters, should not voice their uneducated opinions on these matters - if they are educated on the matter, then they need to disclose exactly what their investments are in auckland property - On CNBC, investors often try to 'talk up their own book' when on TV, but for purposes of full disclosure are always required to say if they have holdings in the stocks they are talking about.
A single house (which in reality is more likely 2 or 3 sections depending on how unity plan unfolds) selling for lots is not news.
I actually got asked by an auckland real estate agent if I read the herald, after he had rattled off some past growth numbers in auckland as if 20% yoy growth is just what happens in auckland.. I told him no its merely entertainment, I research the numbers from reinz, qv, propertyguru, statsnz, all sources he didnt follow.
Yes I have noticed that a lot of Auctions now have been moved to being held 'on site' of the properties to be sold. This is a bit of an improvement as at least it allows everyone not just Investors to get a chance to purchase a home.
This is also an indicator that the AKL property market is slowing down, since it requires more effort on the Agents side rather than just flogging it off from a property list in an auction house.
Guess those Estate Agents are just going to have to really earn their commission of 4% + marketing ++ Honestly it makes my eyes water at just how expensive it is to sell a home here, I'm surprised that more people haven't switched to private sales.
HSBC is the banker for most of the boiler room scams run across Asia that have conned up to USD2 billion from victims in the mainly English-speaking world. Obviously privacy overrides criminal behavior in their eyes, despite the attention of the media.
http://www.scmp.com/business/money/article/1681719/hong-kong-banks-caug…
Has anybody heard anything about the predicted new model for bank lending. Apparently when the extrapolated reductions of rates on mortgages eventually move into negative territory depositors will have to pay mortgagors for using their money. The banks will merely be 'conduits' for bringing the borrowers and lenders together. They will then clip the ticket for their commission. I don;t know what to make of it.
When mortgage rates go negative? That doesn't make sense. I could envisage a scenario where mortgagees can buy insurance on the future value of their purchase. The banks can work out some ingenious way to hedge against the eventuality or even package it and sell it on the secondary market.
Anyone know why ANZ's mortgage rates are no longer being compared in the borrowing table? (see http://www.interest.co.nz/borrowing)
You are wrong. They are. Own goal. You are probably using an ad blocker. If you do that, you should expect to get only partial access. Our's is a free service for readers. But it costs a lot to produce. Those costs are paid for by the advertising we sell. By using an adblocker you are free-riding. If everyone did that, 'free access' could not exist. The fact that most people don't, means your access is 'selfish' in some way.
The fact that most people don't, means your access is 'selfish' in some way.
Why say that David..??
Hes' not free riding by using an ad blocker... Hes' giving u page hits..
Maybe your ad revenue is related to how many page hits you get.....
Maybe giving away "free access" is not altruism ...but simply a business strategy.... selfish in some way....???
Out in internet land there are pop up ads that are like pollution... ad blockers are great
Interesting misconcention Roelof. No company buys ads based on 'page hits'. That would be just wasting money. Also, no pop-up ads on interest.co.nz. But I agree, 'free' is not altruism; yes it is a business strategy.
In NZ all we can get is the "New York price" for ads, but we can never deliver anything like a "New York volume". So it is very tough to do what we do. Universal adbockers would make it impossible to pay any of our journalists or analysts.
There is some truth in what you say - in an isolated way
However, like it or not, you are operating in an on-line world that is inundated with irritating advertisements that distract and annoy to such a degree that people finally seek the benefits of ad-blockers. Nobody is saying that you provide annoying advertisements. You are collateral damage. That's the task you take on when you operate in this world, and I'm not sure how you can isolate yourself from the contagion caused by others.
I suspect you need to maintain the quality of what you provide, and as the outer world becomes more polluted, so you will always need to seek ways to improve the breadth and depth of your operation
Still requires work.... the work needed to get knowledge and understanding...
What is happening to Farmers has happened before.. ( The boom bust in commodities has happened often enuf )
The Real estate game, in NZ, will change and at some point we will have some kind of crash...
All the investors without knowledge and understanding will be lost at sea.....
In todays volatile world.... if one is investing with 'leverage"..... one needs to be ones own "hedge fund Manager"... ( best metaphor I could come up with )..
traditional "investing" has gone out ..... as Central Banks experiment with QE ...-ve interest rates...etc..etc.. ( eg.. return on investment in farming is not that good... )
Globalization, in particular countries with "open borders", has complicated the understanding of local economic and investment issues..
How long can NZ rock and roll , until we have a crisis..??
How desirable is NZ to Foreign investors..and for how long.??
How much longer will the Political climate opening welcome Foriegn investment in NZ real estate..??
(watching the capital flight from the "BRIC" countries is a scary thing...)
lots of questions.... The days of simply making a fortune while doing nothing are probably over....
The AUS/Kiwi banks are rorting us - margins wider than ever, profits huge. They all have the capacity to offer sub 4% rates right now but kiwi borrowers happy with rates in the 4.3% area so the banks get away with it. Same with petrol - the price went up with every increase in the oil price a few years ago but now has hardly moved down in relation to the slump in oil prices. Why do we put up with it?
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