Commonwealth Bank cuts rates 1pc

COMMONWEALTH Bank said it will cut its variable home loan rate by 1 per cent, making it the last of the big four banks to pass on the Reserve Bank of Australia's interest rate cut in full.

The cut lowers Commonwealth Bank's variable mortage rate to 5.74 per cent from Februrary 13.

However, Ross McEwan, head of retail banking at Commonwealth Bank warned 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."

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