Professor Philip Lane:

In the work we did on this there was considerable discussion on what is a sustainable interpretation of prevailing rate. I keep making the distinction that the prevailing rate is generally interpreted as the rate the bank would offer at the conclusion of the fixed rate period. To repeat, in any individual case there may be additional documentation and evidence that any individual could bring forward to state it had been conveyed to him or her that prevailing rate meant something different. In general, the interpretation is the rate prevailing at the end of the period of the fixed rate. However, that does not rule out how an individual case might be heard under appeal or to the ombudsman.