1.99% HSBC Mortgage Special

HSBC canada lowers mortgage ratesThe spring mortgage market just got another boost. HSBC has unveiled a brand new 1.99% 3-year fixed that is now the lowest mortgage rate in Canada.

It’s for default-insured (“high-ratio”) mortgages only, but it’s spectacular nonetheless. The last time the bank had a rate this low was July 2017 on a 5-year variable.

“We are responsive to the market, which includes the impact of bond yields on cost of funds and competitor rates,” said Jonathan Bundle, Head of Products, Wealth and Personal Banking, HSBC Bank Canada. “When bond yields decrease, we look to see if we can pass some of the benefit on to our customers as we continue our low rate ‘no haggle’ pricing strategy.”

HSBC mortgage rates have led all banks for much of the past few years. Its online mortgage strategy, and its tendency to lead the market when bond yields drop, has been a key contributor to its growth.

Most other banks, meanwhile, are taking their sweet time to pass along lower published rates, in keeping with falling yields.

Spring Mortgage Market is Heating Up

HSBC unveils hot mortgage rate offersThis rate sale marks the first headline-making national mortgage promotion of the spring real estate market, which is now well underway.

HSBC also launched three other tantalizing specials today:

Jargon Buster: A “switch” is when you transfer your mortgage to a new lender with no increase in risk. It is distinct from a “refinance,” which entails getting an entirely new mortgage, often with a bigger loan amount, longer amortization or line of credit.

As with many lenders, HSBC’s best rates are for default-insured mortgages. That 2.29% rate is the lowest in the country for a 5-year fixed. Note: refinances are 10 bps above the bank’s low-ratio rates.

“There is a balance sheet benefit to the lender when a mortgage is default insured, which is something we look to pass on to our customers,” Bundle explained. High-ratio borrowers also pay a default insurance premium, which protects the lender if they don’t pay their mortgage, thus lowering the lender’s cost on a portfolio of such loans.

If low rates weren’t enough, HSBC also has a cashback promo underway. It pays you $1,200 to $3,000 depending on the size of your mortgage. (Details)

“It is in place to offset the set costs associated with buying a home or switching your mortgage to another lender (penalties, legal fees, appraisal, moving costs, etc.),” says Bundle. The minimum mortgage to qualify is $200,000 and your mortgage payment must come from an HSBC chequing or savings account.



12 Comments

  • Jim says:

    Looks like a dead cat bounce in stocks and yields. This is not over. Consumer and business spending is drying up by the day. I bet we break yesterday’s low in the 5 year yield by the end of next month.

  • Bryan Walsh says:

    If you’re going to tell the story, tell it in full.
    Like the fact that you need to have a
    ‘premium’ account with HSBC to qualify.
    Meaning you need $100k in investments
    With them. And must deposit $6500 every
    Month into the account..

    • The Spy says:

      Not true Bryan. HSBC requires no account with the bank to qualify for its promotional mortgage rates.
      You need an HSBC bank account only if you want the cash rebate. That requirement is noted in the story.

  • Sarah Nhan says:

    Brian is correct. I shopped with HSBC in October 2019 because friend said she got awesome rates. It turns out for those prime rates you must have a $100k or $50K checking about with them. Needless to say I went with another company

    • The Spy says:

      Sarah, This is not the company’s policy for its special mortgage rates. They just confirmed that in writing to us. Feel free to email and we’d be happy to look into it for you.

      P.S. What “prime rate” did you apply for?

  • Yurg Thomas says:

    Wrong, you need $100k for this offer just confirmed

  • Sarah Mathieu says:

    Just messaged a rep on HSBC website and she said no strings attached, just as long as new HSBC client and High Ratio. Where are you guys getting your info in the minimum account balance required being $100k?

  • Phuleswar DAHARI says:

    I have to renew my mortgage and I am looking for the best rate. Can you tell me what the best rate i can get from HSBC for K$450 mortgage

  • Dave says:

    I have a mortgage with HSBC and a minimum balance in the account is not necessary. The 100k is just to get premier account status, which means you are treated like a vip and have an account manager. Less than 100k you get advanced account status.

    Don’t forget the referral bonus on top of the cash back bonus for closing costs. Say another HSBC member referred your and you each get $for opening a chequeing account.

    • The Spy says:

      That’s right Dave.

      I confirmed from HSBC directly. They state there is no other qualification criteria “outside of our [normal] lending criteria.”

      There is no minimum asset requirement but the borrow must be reasonably well qualified.

      Confusion may have arisen from one of the qualifying criteria for HSBC’s “Premier” proposition, which is $100,000 in assets. That has “nothing to do with these rate offers,” the bank said.

  • Len says:

    Just a quick question – How come the HSBC 3 year fixed special doesn’t show up in your rate search (done March 10th)?

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