Kiwibank made the most interesting change to its home loan rates last week, dropping its five-year rate a full 51 basis points to 6.99%.
This is one of the lowest rates in the market for any rate at the moment, showing how inverted the yield curve is. It's also interesting as not a lot of business gets written on the very long rates.
If the move was designed to set off a bit of a price war in this part of the market it has, so far, failed. None of the other lenders researched by www.goodreturns.co.nz have matched it.
One point the change does illustrate is that Kiwibank has been much more aggressive in its pricing strategy at the moment.
When the first rate war broke out in the last quarter of 2004 Kiwibank chose not to participate fully. Subsequently it has been shown that Kiwibank suffered with reduced market share.
This time around when the BNZ started cutting rates, Kiwibank has been one of the more active participants in matching it on a head-to-head basis.
Recently it had been matching or bettering what BNZ was offering in the two and three year fixed rate market.
With interest rates remaining remarkably stable, and an official cash rate review just around the corner (July 28) there has been little movement in home loan rates during the week.
The only changes, aside from Kiwibank, were to Equitable's First Equity Loan, where the one and two year rates went up 10 points to 7.91%, and Loan Plan which upped its one year rate and dropped its four and five year ones.
To compare home loan rates go to http://www.goodreturns.co.nz/section/200.html
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