The bank said the move will shave $145 a month in repayments on the average home loan of $250,000.
The move comes after the Reserve Bank of Australia reduced the cash rate by 100 basis points yesterday, in a bid to prop up the slowing economy.
St George said they couldn't pass on the full rate cut because of higher costs due to the financial crisis.
"Due to the ongoing impacts of the global financial crisis, financial institutions continue to face
higher costs in both the short and long term wholesale funding markets," said St George General Manager Retail Bank Distribution Andrew Moore.
"These much higher funding costs overall mean that we are unable to pass on the full RBA decrease of 1.00%."
Banks have moved quickly to pass on all or part of the interest rate cut for home loans.
Commonwealth Bank and NAB have passed on the full 1 percentage point cut and Westpac is cutting interest rates by 0.8 per cent.
ANZ will reduce rates on variable mortgages by 0.83 per cent and BankWest will cut rates by 0.85 per cent.
Q&A: Interest rate cuts won’t have immediate impact
RAMS cuts home loan rates
