The cost is based on credit rating, so Government is using market rates. I think this makes sense, otherwise it encourages banks to move up the risk curve and not worry about their credit rating as they can rely on the Government.
So MQG would be paying more than the big 4 for use of the guarantee.
There was an article in the paper the other day. CBA just raised some money without the guarantee at the same rate at which it would have raised with the guarantee. So a good sign of markets returning to normal.
