How can these banks borrow for less than Australian banks, or is it just an excuse to increase the bottom line?

Q.

In the recent round of mortgage rate increases, our banks cited the cost of international funds as the reason for the rate rises independent of the RBA. If this is the case, why then can overseas banks offer lower rates? For example the Halifax in the UK offers a standard variable rate of 7.25% and US 30 year mortgage rates are quoted at 5.67% or less. How can these banks borrow for less than Australian banks, or is it just an excuse to increase the bottom line?

Bank interest rates have gone up because of reserve bank pressure and because the banks themselves are paying much more for their funds because of the worldwide credit crisis. Anyone who obtains funds from outside Australia leaves themselves open to currency fluctuations and often the cost of hedging is equivalent to a saving in interest.