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%.
Tuesday, July 12th 2005, 6:10AM
by The Landlord
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.
