It's just the beginning of the federal election campaign and politicians are already jostling over whose government will keep interest rates lower.
Senator Anne Ruston recently told ABC's Radio National that the Coalition always had lower interest rates.
Meanwhile, The United Australia Party recently proposed capping all mortgage rates at 3 per cent for the next five years.
But how much control do politicians really have over what your bank does?
We chatted to Associate Professor Mark Laurence Humphery-Jenner, from the University of New South Wales' Business School, to get the lowdown.
How does your bank decide how much interest to charge?
Bank interest rates reflect the cost to banks of getting that money, explained Associate Professor Humphery-Jenner.
"Often, this is set in an international environment. So, if overseas rates go up, banks' cost of capital goes up, which increases interest rates," he said.
What the Reserve Bank of Australia does with its official cash rate plays only one part of what banks take into consideration, with the international lending landscape playing a large role.
"The RBA's policy rate [the cash rate] can play into this to some extent in terms of the domestic cost of capital," Associate Professor Humphery-Jenner said.
"[But] those policy rates are one - but not the only - factor that influences banks' costs; and thus, bank interest rates.
This is because banks obtain only some of their capital domestically.
"But, if there are more loans than there are deposits, banks must borrow from other financial institutions. This exposes them to international interest rates, for example. In any case, banks must also pay overheads and salaries."
"International factors influence interest rates as banks obtain capital from overseas and international events drive inflation.
Further, central banks around the world have kept interest rates at low or "accommodative" levels. Central banks will need to increase rates in order to tackle inflation. The Federal Reserve, for example, is expected to do 6-7 rate hikes in 2022. The RBA is more sanguine."
What is the official cash rate, anyway?
It's the rate the Reserve Bank of Australia charges on overnight funds lent to Australia's commercial banks. It's determined by the Reserve Bank board at the start of each month, with the bank taking into consideration a raft of factors, including inflation. It's been at a record-low of 0.01 per cent since November 2020.
If the cash rate goes up, the cost of your bank's domestic borrowing will rise, and they'll hike their mortgage rate products to cover these losses.
If you're on a fixed rate, you won't feel any immediate pain until your fixed rate period ends, but if you're on a variable rate chances are a rise in the official cash rate will soon lead to a bump in your mortgage payment.
Many banks have been pricing in a rise to the official cash rate already, increasing their fixed rate products to reflect what the cost of borrowing might look like in the future.
Can politicians tell the RBA to keep rates low?
The short answer? No. The Reserve Bank operates independently from the government, per the Reserve Bank Act.
"Politicians cannot directly influence interest rates absent an interest rate cap or floor. Politicians only indirectly influence interest rates," explained Associate Professor Humphery-Jenner.
Should politicians try capping interest rates?
They could try, but whether it's a good idea or not is debatable. When the United Australia Party recently proposed capping all mortgage rates at 3 per cent for the next five years, it did not outline how this would be achieved.
Even if the UAP did manage to intervene in the private lending market, or amend the Reserve Bank Act to remove the central bank's independence, capping rates could have unintended consequences for the property market.
"An interest rate cap is an extremely bad policy," Associate Professor Humphery-Jenner said.
"Price ceilings reduce the supply of any good, and capital is no different. An interest rate cap will simply cause banks to ration capital and provide it to the least risky borrowers. Ironically, an interest rate cap would exacerbate inequality because wealthier borrowers might be perceived as safer bets for the bank."
Can politicians influence how much interest borrowers pay?
This is less clear cut.
"All politicians would like low rates. But, rates are often outside politicians' direct control," Associate Professor Humphery-Jenner said.
"Politicians can indirectly influence rates in a few ways. These include whether politicians stoke, or restrain, inflation. Politicians could also influence banks' costs. But, any such action has its own risks.
Politicians can influence inflation to a "limited" extent, the Associate Professor explained, using fiscal policy. This arises through 'fiscal policy'.
"Different types of spending are differently inflationary. Spending that helps to increase 'supply' is relatively less inflationary than simply giving individuals money. For example, a tax cut might incentivize people to work more. In so doing, it increases labor hours and/or labor participation. In turn, by increasing supply, it might not increase inflation," he said.
"But, it is nuanced. The impact of a tax cut turns on multiple factors, including whether it would encourage more supply. Incentivizing startups - and startup investors - and increasing productivity can help to resolve supply issues [for example]," he added.