Yesterday the government announced it had directed the ACCC to look into how banks were charging mortgage holders. Everyone loves to hate banks, so it’s a pretty easy political exercise, even if in reality it will likely lead to no change. Because when asking whether the banks are gouging us and is this investigation warranted, the answer, as Reverend Lovejoy would say, is “short answer, yes with an if; long answer, no with a but.”

The reality is that it is a bit complicated.

But before we get to it, I want you to promise me that when you have finished reading this you will check out the range of mortgage rates being offered and then ring up your bank and ask for a better deal.

Seriously. Do it!

For what it is worth, I finally got around to doing this two weeks ago and saw my home loan cut by 0.59% points. A friend then had hers cut by a whole 1% point after hearing what I had done. I have no idea if you will get a rate cut, but I can tell you this – no bank will offer you a deal if you don’t ask.

A major part of the banks’ business model is to assume (rightly it seems) that we are gormless consumers who expect the rate that we have is the best they can offer.

Banks act like this because they know most of us just go to one of the big four banks when we need a home loan:

We will haggle over buying furniture but not the rate of the loan for the house in which the furniture will be put.

So ring your bank.

And if you want a bit of a guide, just realise that right now the average rate for all outstanding owner-occupier home loans (both principle and interest) is 3.8%:

But while we often focus on mortgages – and this is the only thing the government has directed the ACCC to look at – let us also remember that there are two sides to banking and talk about deposits.

It is true that the average mortgage rate is now well above the cash rate – and much more so than was the case before the GFC:

But the gap between the average term deposit rate and the cash rate is also higher now than before the GFC:

Prior to the GFC, the banks didn’t care too much about your deposits. They were able to get cheap short-term funds from overseas money markets, so the need for your money was not as great.

Before the GFC the average rate of term deposits was actually lower than the cash rate. But no one really cared, because with rates above 5%, they were averaging 2%-3% above inflation.

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Given deposits in Australian banks are essentially guaranteed, that meant retirees and others who relied on term deposit returns for income were able to get a 3% real return with zero risk.

Pretty sweet but certainly not the case now:

The average rate of term deposits is now 0.3% pts above the cash rate, but also 0.3% below the rate of inflation.

In effect, having your money in a term deposit will see you lose money in real terms.

We need to consider this when we look at the question of whether or not banks should pass on the full rate of mortgage cuts. Because to an extent we could also be saying they should pass on the full cut to term deposits.

The reality is banks can’t really cut deposit rates any lower and still expect to attract people willing to give them their money. Half of all the money that banks use to then lend to home owners and businesses comes from our deposits – so they certainly do need it.

Banks, however, cannot go overboard arguing that life is tough for them. In the past six months the cost of their short-term funds has dropped to a level not much higher than it was before the GFC:

And here is the crucial thing – the gap between what banks charge us for a mortgage and what they pay us for a term deposit has widened greatly:

So they certainly have been more willing recently to cut deposit rates than mortgage rates.

But while the government will like looking tough on the banks, this “probe” is pretty much a face-saving exercise. There is not much governments can do in a free market to force banks to do anything unless they find evidence of collusion.

And the broader issue is not that the banks have failed to pass on the full rate cuts, but that rates have been cut to such a low level.

The Reserve Bank has been forced to do all the work stimulating the economy, while the government has been more worried about returning to a budget surplus.

And we should also remember that the RBA takes into account how much of the rate cuts are passed on by the banks.

Had the banks passed on the full amount of the cash rate cuts that have occurred this year, it is likely the RBA would not have cut the cash rate by as much. In effect, the rate you are now paying most likely would not be much different, if at all.

But none of this is all that new, and there is unlikely much the ACCC can do. They will most likely respond by arguing that the best thing is for people to be willing to move banks and to ask for a better deal.

And you should.

So now that you have finished, get on the phone and ring your bank.

• Greg Jericho is a Guardian Australia columnist