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HSBC: Low rate is about growth in NZ, no stunt

HSBC's low interest rate is part of the bank's growth strategy and is not a loss-leader, insists its head of retail banking.

The bank launched a market low home loan rate of 3.87 per cent on an 18-month fixed term today.

Those who take it up must borrow at least $500,000, or have investments worth over $100,0000 with it.

Glen Tonks, head of retail banking and wealth management at HSBC New Zealand, said the bank was still able to make money on the rate and it was designed to boost its growth.

"We are serious about growth in New Zealand. This is not a stunt."

Tonks said the bank had grown above the market rate this year with much of the growth coming from Auckland, despite a slowdown in the city's housing market.

"The reality is many people have mortgages over half a million dollars."

Tonks said it was pleased with the number of people switching their mortgages to it.

He would not give a timeframe for how long the offer would be available for, but said it was for a limited time.

The rate was only being offered for a limited time to new HSBC Premier customers, and existing HSBC Premier customers who borrow at least an additional $100,000.

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