The official cash rate, or base rate, set by the Reserve Bank of Australia (RBA), is a benchmark rate of interest that determines the rate at which banks can borrow from each other, usually overnight. Banks and other lenders then add a margin (to cover their total borrowing costs and other costs, and make a profit), and the resulting rate forms the standard rate at which they are prepared to lend to consumers. So when the RBA changes the base rate, lenders will adjust their own rates up or down. But they do not always pass on the full increase or decrease to consumers.