The mortgage rate cuts keep coming with 3.79% the new lower benchmark, this time set by a challenger bank. But these reductions come with matching term deposit cuts

HSBC has loaded new lower home loan rates to its website, claiming back many market leading positions with sharply lower rate offers.

This comes after the Co-operative Bank also lowered rates. Both banks did this while chopping their term deposit rates.

The new low HSBC home loan rates feature 3.79% as their offer for one year, eighteen month, and two years fixed.

They are all the lowest in the market, except for the 3.60% two year rate by China Construction Bank.

For three years, HSBC has a 3.89% rate, the same as from BNZ (and TSB under their price-match policy).

For four years fixed, HSBC's new rate is a low 4.19%, undercutting the sharp rate from Kiwibank.

And for five years, HSBC has also gone lower than Kiwibank at 4.29%.

The only Co-operative Bank rate change that is market-leading is their reduction from 3.99% to 3.95% for their six month fixed rate.

The background situation is of falling wholesale rates, and swap rate reductions have actually picked up.

Since the beginning of May, wholesale swap rates have fallen more than -20 bps to record all-time lows. Wholesale markets are keying off what they think Adrian Orr thinks.

The combination of wholesale rate falls and matching term deposit rate cuts allow banks to reduce home loan rates while maintaining their net interest margin.

And don't forget that TSB is offering "a cash contribution of up to 0.50% of the total loan amount, up to a maximum of $4,000" until June 15. There are conditions of course, but many borrowers should be able to meet those. TSB does not price-match HSBC offers.

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 May 30, 2019	%	%	%	%	%	%	%
ANZ	4.99	3.89	4.19	3.95	4.05	4.85	4.95
	4.95	3.95	4.19	3.89	4.05	4.35	4.45
	4.99	3.89	4.79	3.95	3.89	4.35	4.45
	4.99	3.85		3.99	4.09	4.29	4.39
	4.99	3.89	4.09	3.95	4.05	4.35	4.45
	3.95	3.95	3.99	3.99	4.05	4.35	4.45
China Construction Bank	5.15	5.10		3.65	3.90
ICBC	4.85	3.99	4.19	3.99	4.49	4.95	4.99
	4.85	3.79	3.79	3.79	3.89	4.19	4.29
	4.99	3.89	3.89	3.99	3.99	4.49	4.49
with price match promise	4.85	3.89	4.09	3.89	3.89	4.35	4.45

In addition to the above table, BNZ has a fixed seven year rate of 5.95%.