Real Estate

HSBC Mortgage Rates as of February 2024

In the dynamic landscape of Canada’s financial markets, the prime rate stands as a pivotal force, influencing variable loans, lines of credit, and, notably, mortgages.

HSBC, a major player in this arena, currently sets its prime rate at 7.2% as of January 31, 2024.

In line with other leading financial institutions in Canada, this rate undergoes adjustments primarily in response to the Bank of Canada’s (BoC) interest rate policy.

Current HSBC Mortgage Rates

Mortgage TypeAPR*Mortgage Rates*
3-year Fixed Closed6.12%6.04%
3 year Fixed Closed5.64%5.59%
7-year Fixed Closed5.42%5.39%
10-year Fixed Closed5.91%5.89%
5-year Variable Closed**6.21%6.19%
5 year Variable Closed**6.58%6.55%
*APR – Annual Percentage Rate. *HSBC Prime Rate – 0.65% for the 5-year Variable Closed mortgage.

HSBC Posted Fixed Rates Open Mortgage

6 months8.75%
1 year7.55%

HSBC Posted Fixed Rates Closed Mortgage

6 months7.04%
1 year7.34%
2 years6.89%
3 years6.74%
4 years6.59%
5 years6.89%
7 years6.84%
10 years7.09%

HSBC Posted Variable Rate Open Mortgages

3 years10.50%

HSBC Posted Variable Rate Closed Mortgages

5 years7.50%
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The Synchronization with Bank of Canada Policy

HSBC, akin to its counterparts, typically aligns its prime rate movements with the decisions of the Bank of Canada.

When the BoC adjusts its key rate, known as the target for the overnight rate, HSBC mirrors the change in its prime rate by an equivalent percentage.

This synchronicity ensures a uniform adjustment in interest rates across the financial landscape.

For instance, if the BoC raised the overnight rate by 25 basis points, HSBC would promptly raise its prime rate by an equivalent of 25 basis points.

However, it’s noteworthy that there have been instances where HSBC deviated from this norm.

When the BoC implemented a rate cut in certain situations, HSBC opted for a more conservative adjustment, not fully passing on the entire reduction to its prime rate.

This occasional departure from the synchronized movements underscores the intricacies of financial decision-making within the banking sector.

Unraveling the Impact on HSBC Variable Mortgage Rates

For individuals opting for a variable mortgage with HSBC, understanding the relationship between the HSBC prime rate and their mortgage rate is crucial.

The interest rate for a variable mortgage is expressed as the HSBC prime rate, augmented or diminished by a specific percentage point.

For example, if the HSBC prime rate stands at 3.00%, and your mortgage rate is prime minus 0.50%, your effective mortgage rate would be 2.50%.

Should there be alterations to HSBC’s prime rate, your mortgage rate would fluctuate in tandem.

For instance, if HSBC raised its prime rate to 3.25%, your mortgage rate would adjust accordingly to 2.75%.

This direct correlation emphasizes the importance of staying informed about changes in the HSBC prime rate, as it directly impacts the cost of variable-rate mortgages.

HSBC Fixed Mortgage Rates and Stability

In contrast to variable-rate mortgages, fixed-rate mortgages remain impervious to immediate shifts in the HSBC prime rate.

When you secure a fixed-rate mortgage with HSBC, your interest rate remains constant throughout the term.

While this shields you from the risk of rising interest rates during the term, it also means you won’t benefit from potential rate decreases.

Choosing a fixed-rate mortgage becomes prudent if you anticipate an upward trend in mortgage rates or seek the stability of a guaranteed rate irrespective of market fluctuations.

This strategic decision-making aligns with the philosophy that fixed rates offer a shield against market volatility, providing financial predictability and peace of mind.

Navigating the intricacies of HSBC’s prime rate and its implications on mortgage rates requires a nuanced understanding of the financial landscape.

As a discerning borrower, staying attuned to the synchronization between HSBC’s prime rate adjustments and the BoC’s policy decisions is essential.

Whether opting for a variable or fixed-rate mortgage, strategic choices aligned with your risk tolerance and market predictions can pave the way for a financially sound future.