It is a disadvantage that magnifies the longer the term of the interest rate fixed contract. In both countries the margins to swap have decreased over this longish period, even as rates have moved up here. Our mortgage contracts are relatively simple affairs; you borrow over the term at a specified interest rate. However in Australia, the stated interest rate is just the start. As rates reduced, that limited the practical options banks have to 'maintain' their net interest margins.

Source: Stuff December 30, 2021 02:45 UTC