HSBC 4.59% 2yr fixed

[heroine]

Hello,

Does anyone here have recent experiences with HSBC? I had enquired about their 4.99% variable deal but was told it expired on Friday - but that a new 2yr fixed rate was available: 4.59%.

That would cover a good two interest rate cuts. It all sounds too good to be true.

Thanks!

 

[DavidMc]

Entry fees are apparently around $1k (valuations, etc - stuff we are now used to getting for free), although you would earn that back eventually due to the low rate.

The ongoing discount when it goes variable of 0.7% is OK, although it's not too hard to get an ongoing of 1% these days.

When the price difference is negligible, I prefer to give my business to Australian business. As much as I hate the Big 4, they are owned by us via our Super funds. Hong Kong Shanghai Bank of China on the other hand...

 

[Aaron_C]

EHong Kong Shanghai Bank of China on the other hand...

.....is NOT owned by Chinese - but by the British. Your point?

 

[Peter_Tersteeg]

Entry fees are apparently around $1k (valuations, etc - stuff we are now used to getting for free), although you would earn that back eventually due to the low rate.

The ongoing discount when it goes variable of 0.7% is OK, although it's not too hard to get an ongoing of 1% these days.

Given the upfront costs and the fairly average long term discount of 0.7%, I suspect HSBC has done their numbers very carefully because in many cases borrowers probably wouldn't be better off over the long term. Many lenders are doing 0.9% discounts quite easily at the moment, thus some people might actually be worse off with this loan after about 3.5 years, possibly sooner given the high entry fee. The low 2 year fixed rate could be considered a teaser to get you in.

There's a few alternate lenders doing similar deals with fixed rates well below 5% at the moment, without the high entry fee, this probably isn't the lowest fixed rate in the market. Also consider that a few lenders have dropped fixed rates again recently. Variable rates could easily drop further, fixing today may not be the ideal strategy for the rate hungry.

 

[VCDenton]

sorry I cant hold it

 

[DavidMc]

.....is NOT owned by Chinese - but by the British. Your point?

My point is I'd rather buy Australian than foreign owned, as I said in my post? Especially in this case where it's value is questionable.

 

[heroine]

Given the upfront costs and the fairly average long term discount of 0.7%, I suspect HSBC has done their numbers very carefully because in many cases borrowers probably wouldn't be better off over the long term. Many lenders are doing 0.9% discounts quite easily at the moment, thus some people might actually be worse off with this loan after about 3.5 years, possibly sooner given the high entry fee. The low 2 year fixed rate could be considered a teaser .

It's 500k so the fee (850) would become insignificant quite quickly. Yes I can wait for a cut but if that comes in December, I'll pay for that bet too.

It seems the only real risk is to be stranded with an uncompetitive variable rate in 2yrs if for some reason I can't refinance then (this should not happen).

My next best alternative is loans.com.au with var 4.75% and 650 in fees.