RWC finishes; rate war battle commences

It's a moot point whether the two are related, but it is what we expected to happen. However the magnitude of the first shots fired in the battle have surprised.

The underlying themes to come out of the rate changes are that:

• No-one has changed fixed rates. The best rates at the moment are the offset products, Westpac's revolving credit loan and the smaller lenders including Public Trust, SBS and HBS, Kiwibank and The Co-operative Bank.
• Kiwibank, unsurprisingly, started things off a week ago with some pretty big cuts across its fixed rate card.
• Amongst the big banks Westpac has taking leading positions on short-term rates up to two years; for two years or more ASB is the leader.
• The two-year rate is the most interesting with TSB putting up the best rate, one point lower than Kiwibank and Westpac's 5.89%. The Co-Operative bank sits at 5.90%.
• SBS and HBS did not make changes across the fixed rate terms. Rather they changed the two year rate to 6.15%
  
• BNZ initially introduced a 30-month rate, but has since move to cut fixed rates across the board.

While rates are one front where things are happening some banks are, as one broker described, "throwing money" around at the moment.

The current set of results illustrates that the banks have plenty of money to play with and it is no secret they are sitting on rather fat, or even bloated, margins with their home loan business at the moment.