HSBC cuts fixed-term mortgage rates for well-heeled

HSBC’s springtime rate cut has given its well-heeled premium customers the lowest home loan rates in the market.

This morning the bank dropped its fixed-interest mortgage rates, reducing one-to-five-year terms for premier customers by up to 29 basis points.

The full list of rates are provided below.

HSBC’s head of retail banking and wealth management, John Barclay, said the rate cut was about lower rates provided certainty in uncertain times and was targeting customers who wanted to lock in a bit more certainty to their cash flow.

HSBC’s mortgage book broadly matched the overall mortgage market with about 55% of its mortgage holders on floating interest rates, he said.It was expected a large number or customers would take the opportunity to fix their mortgages with the new rates.

“We’re not suggesting people will necessarily commit their whole mortgage to these fixed rates - they might want to get a blended rate [of fixed and floating] and get a bit more certainty to their cash flow.”

“These are the best rates that have been offered for these periods for some time,” he said.

Mr Barclay said the mortgage market was competitive, but he did not expect other banks to follow HSBC in cutting their rates.

“They're certainly competitive a the short end, but we’re just trying to give our customers who are relatively well-heeled and well learned to maybe take advantage of that."

HSBC Premier customers are required to have a minimum $500,000 home. loan or $100,00 in savings and investments.

Nationally, the country’s mortgage book for all banks had grown 1.1% year to August.

SBC was still seeing large amounts of repayments on its home loans, said Mr Barclay.

“That’s not refinancing, that’s repayments - people prudently taking the opportunity to reduce their exposure in these maybe uncertain times."

HSBC's new rates are as follows:

- One year 5.65%, down 14 basis points.

- Two year 6.1%, down 25 basis points.

- Three year 6.5%, down 29 basis points.

- Four year 7.05%, down 25 basis points.

- Five year 7.35%, down 24 basis points.