On the First Tuesday of every month the board of the RBA (Reserve Bank of Australia) meets and sets the target for the cash rate.
I understand that they are trying to adjust the amount of money people have to spend by changing the amount of people's income that goes into paying their home loan.
The question is how does the RBA affect the interest rate of these home loans?
This isn't a legally-binding level on the banks: it's uncommon, but it does happen, that banks don't follow the RBA or they change their rates independently of the RBA.
Also, if interest rates are going up, why doesn't one off the bank decide not to move their home loan rate up with every body else, in order to offer a discount and gain more customers?