Despite interest rates at close to historical lows the Australian mortgage belt is still likely to be filled with frowns as anticipation grows on whether loan providers will match recent rate rate cuts from the Reserve Bank.

President of the Investors Club, Kevin Young, says the Reserve Bank and government is failing to hold the banks accountable for dropping rates.

On Tuesday the Reserve Bank cut the official cash rate by 25 basis points.

Mr Young says the decision was 'pointless' with the banks unlikely to pass on much of the rate cut.

He says the idea promoted by government of walking down to another bank and changing the lender isn't feasible.

"I think Wayne Swan must have his head in the bucket.

"If you leave tweedledee and you walk down to tweedledumb, the difference in the rates aren't that much but tweedledumb is going to say ok we want an application fee, a new evaluation fee and... you're going to say why do I bother shifting and you'll go back to tweedle (dee)," he says.

Mr Young says he believes interest rates are too high and Canada is an example of a nation, in a similar position to Australia, with a monetary policy creating much lower interest rates.

"Canada is a similar resource rich country to us - its cash rate is one percent not 3.5.

"Banks draw their money from the same well that our banks do, they're lending out four years fixed at guess what rate? 3.39 percent.

"When our banks are competing with those banks - they match them - they lend out at that rate as well.

"You go to Singapore, Hong Kong, anywhere our banks are they'll be offering you that rate.

"You can even borrow from them at that rate bring the money into Australia as Chinese can and Singaporeans can and buy Australian property at that low low rate but if you come into Australia and work in Australia that same bank will say we've got to get seven per cent off of you.

"They want to quarantine us in a high cost, high profit zone," he says.

Former bank manager and now university lecturer, Paul Mazzola, says that independence of the Reserve Bank is imperative for maintaining economic growth within Australia.

"The Reserve Bank will act in accordance with its three major responsibilities and that is price stability in the management of the inflation rate, it also has a responsibility to maintain full employment and maintain a term of economic prosperity for the Australian population.

"They try and do that by targeting a range within which they would like to see inflation and the range that they are looking at presently is between two and three percent.

"The argument is that is they can maintain inflation within that range it preserves the value of money which in turn encourages sustainable growth for the economy," he says.

Mr Mazzola says the lower interest rates offered by Australian banks overseas are a result of more competition in that market space.

"One may assume there may be more competition overseas in those loan markets and therefore those overseas branches might be willing to charge a lower interest rate," he says.

Associate professor from University of Technology Sydney, Ben Hunt, says it is a good thing there is room to move for interest rates in Australia.

"There are very big differences in the interest rates charged around the world.

"Although there are some similarities there are differences between Canada and Australia.

"Canada has an unemployment rate of some seven per cent compared to Australia's at around about five per cent - the Canadian economy is not as strong as Australia's.

"The harm in cutting interest rates would be that we encourage too much growth and encourage inflation to increase again.

"The problem with a country like Canada with cash rates at one per cent there's not much more you can lower them if you want to encourage growth," he says.

Mr Hunt says not much more can be done to force Australian banks to match Reserve Bank rate cuts.

"I think it's very difficult for the government to do anything to compel or by changing market conditions to make the banks follow the cash rate movements.

"There are very valid reasons why banks do not match the cash rate... banks require funding of three to five years and so out of the three to five year level there can often be a difference between the cash rate and the rate which is set by the market.

"A bank would always be conscious of the possibility of losing a customer because they don't match the interest rates of another provider," he says.