International bank HSBC has introduced a new low rate mortgage in the hopes it lures in new borrowers and gets brokers to convince clients to switch loans.
The new owner occupier principal and interest loan product comes with a rate of 3.65% p.a. and a comparison rate of 3.66% p.a.
“Lower rates in the market are encouraging customers to refinance their loans, but 25% of mortgage holders don’t know what their home loan rate is, making it harder for them to recognise the financial benefit of switching their loan,” said Alice Del Vecchio, head of mortgages and third party distribution at HSBC Australia.
“A 3.65% p.a. rate like the one we’re offering can make a huge impact on the savings over the life of the loan, not to mention freeing up money in the short-term with potentially lower repayments.”
A home owner with a $700,000 variable rate loan at 4.00% p.a. will save more than $40,000 over the life of the loan by switching to HSBC’s lower rate.
In conjunction with the new home loan, HSBC partnering with RFi Group conducted a survey of 2,000 mortgage holders in Australia to get a feel for home owner attitudes and motivations.
Of those polled, 30% said speaking to a mortgage broker was one of the first steps towards refinancing a mortgage while 25% said they researched loans online.
“Speaking to your own bank or visiting a mortgage broker can help you understand how much switching loans could benefit you. They’re the experts in the market and can help you to do the maths and translate the interest rate into dollars,” Del Vecchio said.
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