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The 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
This 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:
- 2.29% 5-year fixed (high-ratio only)
- 2.49% 5-year fixed (low-ratio purchases and switches only)
- 2.84% variable (low-ratio purchases and switches only)
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.
21 Comments
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.
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..
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.
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
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?
Wrong, you need $100k for this offer just confirmed
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?
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
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.
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.
Just a quick question – How come the HSBC 3 year fixed special doesn’t show up in your rate search (done March 10th)?
Hi Len, It’s a high-ratio rate (for default insured purchases). So make sure your loan to value is over 80%.
See: http://prntscr.com/rebsqk
I need mortgage. $800,000 new mortgage. I am shopping. What I can get from HSBC. Pls let me know.
Hi Getent,
With that size mortgage you may be able to talk HSBC into a lower rate than what they show here: https://www.ratespy.com/best/hsbc-bank-canada-mortgage-rates
That assumes you’re very well qualified.
How much penalties if I break my fixed rate mortgage and start another mortgage ( if the rate down) with the HSBC again or moved to another bank?
I’m looking for a $320,000 mortgage, I’m already a client at HSBC. However I can’t see the 1.99% mortgage rate option on their website anymore, did it already go up since? Is HSBC still the best bank for it? I would like to lock it in ASAP.
Hey Tais, Yep, HSBC’s 1.99% is long gone. The only rates sub-2% these days are variables.
I’m looking to change /Refinance myMortgage from my current lender I don’t like the service. I’m looking for $495,000 mortgage variable five year or your lowest percentage mortgage.
Hi Marty,
We’re a rate news and comparison site and don’t sell mortgages. People generally search for a rate here ( https://www.ratespy.com/best-mortgage-rates ) and then contact the provider of their choice for more details.
Good luck with your rate shopping!
I am looking for mortgage for about 650k and i am going to put 10% of the buying cost for the home that i have looked for. Can i qualify for 1.99% interest rate
Hi Vikram, If you and your co-borrowers (if any) all meet the criteria on this page then there’s a good chance: https://assets.cmhc-schl.gc.ca/sf/project/cmhc/pdfs/factsheets/cmhc-purchase-fact-sheet.pdf?rev=935b8880-7449-4470-97a1-07ceab119411