Spring is here and kicking off the expected surge in housing market activity is Hongkong and Shanghai Banking Corporation Limited (HSBC), with a new low home loan interest rate that sets the stage for further drops.
Effective Monday, the global banking and investment player has announced a home loan rate of 3.35 percent, allowing customers to set a fixed term of between one and five years.
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Home Loan rates on interest.co.nz on Monday peg Kiwibank as the closest competitor, with a one-year rate of 3.55 percent and a five-year rate of 3.99 percent.
Referring to the rate as the lowest ever offered in the New Zealand market, Martine Milicich, Head of Retail Banking and Wealth Management at HSBC confirmed that it's broken a new record.
"It is significantly lower than [the] 3.69 percent per annum for a two-year fixed mortgage [offered] in March this year, which at the time was the lowest fixed home loan interest rate offered in the New Zealand market for over half a century," Milicich confirmed.
Cambell Hastie, Mortgage Broker at Go2Guys said that while the offer is competitive, managing home loan repayments effectively and using the low rates to personal advantage lies within the control of the individual, not the bank rate.
"The interest rate is important, but what's equally important is the amount you pay.
"Success [in paying less over the long-term] is about taking self-responsibility. The banks are not in charge of that - you are," Hastie explained.
While all lenders may not follow suit and match the rate, the rate offered by HSBC gives new buyers - and people coming off a higher fixed term rate - the option to negotiate harder with their own bank.
"Even if they don't match [the rate], they might get closer to it," Hastie said.
HSBC confirmed that the home loan rate is available to new 'Premier' customers with lending of at least $500,000 and/or savings of $100,000 or more (and existing Premier customers who borrow a minimum of $100,000). A minimum deposit of 20 percent is required.