The lowest recorded interbank lending rate in Australia was 0.03% https://tradingeconomics.com/australia/interbank-rate https://tradingeconomics.com/australia/

The lowest recorded interbank lending rate in Australia was 0.03% https://tradingeconomics.com/australia/interbank-rate https://tradingeconomics.com/australia/interbank-rate If you're lending someone a billion dollars, and your labour cost for doing the lending is in the hundreds (maybe thousands?) of dollars, then interest rates quickly approach 0. Sure, no-one would do it for literally 0 dollars, but the rates at which banks lend to each other when there is a ZIRP policy at the central bank (including 0% paid on reserves) is negligible as far as the real economy is concerned. Like the "cost of capital" in that case for issuing a mortgage has nothing to do with the interbank lending rate.