NAB, St George and Commonwealth Bank pass on full interest rate cut

THE big four banks have all passed on yesterday's official interest rate cut in full after NAB and Commonwealth Bank announced cuts to mortgage rates this morning.

Lower ... NAB, Westpac and ANZ have passed on the full 1 per cent interest rate cut to homeowners.

NAB, CBA, St George move on rates

THE nation's big banks have all passed on yesterday's official interest rate cut in full after NAB, Commonwealth Bank and St George announced cuts to mortgage rates this morning.

The three have passed on a one percentage point cut in standard variable home loan rates, matching yesterday's easing from the Reserve Bank of Australia (RBA).

The RBA slashed interest rates by one percentage point, taking the cash rate to a 45-year low of 3.25 per cent.

Westpac and ANZ were the first to pass on the cut yesterday. Announcing a 100 basis point drop to their standard variable home loan rates, easing to 6.91 per cent and 5.91 per cent respectively.

NAB and Commonwealth Bank mortgage rates will both drop to 5.74 per cent from February 13. St George's standard variable rate is now 5.89 per cent, effective February 13.

However the banks warned they may not be able to match future interest rate cuts.

Commonwealth Bank's head of retail banking Ross McEwan said the bank may not pass on future interest rate cuts.

"As the world economic crisis continues and the current pressure remains on funding costs, any future changes in interest rates will need to reflect these higher costs of funds," said Mr McEwan.

"On this basis, we may not be able to pass on in full any future interest rate cuts."

NAB executive general manager Lisa Gray said she expects the differences in home loan rates to close, as banks compete for funds.

"It is important to acknowledge, however, these latest rate cuts have come at a time when our funding costs are at very high levels and we may not be in a position to pass on full rate cuts in the future."