Australia's largest home-loaner the Commonwealth Bank has joined the NAB in lowering rates.
The CBA has annoucned it will drop its fixed rate from 8.94 per cent to 8.69 per cent.
It's the second time the bank has reduced rates this month, claiming also to have the lowest variable rate available.
But the Commonwealth says it can't promise to follow the Reserve Bank, which is expected to reduce the official cash rate by 0.25 per cent in September.
Earlier today the National Australia Bank announced it will reduce its variable home loan rate by 0.25 percent, if the Reserve Bank drops the official rate in September.
It follows intense debate this month over whether or not Australia's big banks would be willing to pass any rate cut the Reserve now seems likely to make.
NAB Australian chief executive Ahmed Fahour says the time is right.
“NAB will be pleased to announce an interest rate cut along the lines of the Reserve Bank, if they were to do so in September.
“This would drop our standard variable mortgage rate to 9.36 per cent.”
But Channel Nine finance expert Ross Greenwood has told 2GB’s Chris Smith, the NAB may not pass on anything bigger
“It fully expects the Reserve Bank to cut interest rates by a quarter of a per cent in September," he said.
"They say that if the rate cut is as some people suggest, a half a per cent, then they’ll relook at the situation and they may not necessarily pass on that full rate cut…”
Australia's other major banks have said they cannot guarantee passing on in full any rate cut.
Two weeks ago, Westpac boss Gail Kelly said she would review the issue at the time. Westpac would have to consider funding costs, pushed higher by the credit crunch, the competitive environment and the effect on its customers before moving its rates.
"Clearly, we would love to pass through the full 25-basis points drop if that were to occur ... but we'll need to factor in all of those issues at that time," she told an investor briefing.
ANZ made similar comments the same day.
At its results last week CBA, the country's biggest mortgage lender, also refused to guarantee that it would pass any cut on to its customers.