Banks under pressure to reduce mortgage rates in line with RBA cut

NAB and Commonwealth agree to pass on 0.25% cut in full but ANZ and Westpac will only pass on part of Reserve Bank's rate reduction

Australia's banks have come under pressure to reduce borrowing costs for customers after the Reserve Bank cut interest rates to a new historic low of 1.25%.

The widely expected move by the central bank on Tuesday saw its cash rate fall for the first time since August 2016, with many economists predicting there could be two further reductions in borrowing costs before the year ends in the face of a weakening economy.