Mortgage lenders use these arrangements to manage the risk of offering fixed-rate loans. If a bank is going to lend you money for, say, five years at a fixed rate, it will often enter into a five-year swap to secure its own funding costs for that period.

The Reserve Bank of Australia is widely expected to reduce the cash rate by 0.25 percentage points to 3.6% at its August meeting, offering relief to mortgage holders amid signs of cooling inflation. Such a move would mark the central bank’s first cut in more than a year and could save homeowners with a $600,

Australia's central bank cut interest rates on Tuesday for a third time this year and signaled further policy easing might be needed to meet its inflation and employment goals as the economy lost some momentum.