Low interest rates are entrenched in Australian commerce, with borrowers and lenders alike facing a unique rates mix.The Reserve Bank of Australia's abstract for an article on funding costs in its latest quarterly Bulletin nails the highlights."Major banks' outstanding funding costs fell notably in 2015, following two reductions in the cash rate. The spread between the major banks' outstanding funding costs and the cash rate also narrowed over 2015. "This was due to lower costs of deposits and a more favourable mix of deposit funding, as well as lower wholesale funding costs. "Lending rates declined in the first half of 2015, reflecting changes in the cash rate and competition for lending, before lending rates increased for housing in the second half of the year; business lending rates are at historically low levels."This leads into a survey of key data."Over the past decade banks have made less use of wholesale funding - particularly short-term debt - and more use of domestic deposits," the RBA wrote."Banks began increasing their share of deposit funding following the global financial crisis as they sought more stable forms of funding. The share of deposit funding stabilised at just below 60 per cent of total funding liabilities in 2014, an increase of nearly 20 percentage points in six years."These deposits are of a flighty kind.In the quest for the lowest cost deposits banks encouraged a switch to at-call accounts."Major banks were able to price their deposit products such that the flow of deposits was predominantly into at-call and transaction accounts, rather than into more expensive term deposit funding," the RBA said."This resulted in a change in the composition of deposits that contributed a further three basis points to the reduction in the funding cost spread to the cash rate," out of a four bps gain to banks.The RBA underplays the importance of the market to the making of monetary policy.Two cuts in the cash rate in February and May of 2015 makes 50 basis points. The market added a third cut, near enough."In aggregate, debt funding costs for the major banks are estimated to have fallen by around 70 basis points over 2015," the RBA said.