Official interest rates have dipped below one per cent for the first time in Australian history, hitting a record low of 0.75 per cent in the third cut since June.

Westpac and ANZ joined the Commonwealth Bank and NAB on Wednesday to reveal their standard variable rates would drop between 13 and 15 basis points instead of the full 25 basis points.

"They never learn, they honestly never learn and it's disappointing," PM Scott Morrison told Sky News on Wednesday.

"I suspect we're both mortgage holders and like all the other mortgage holders they have a reason to be disappointed in the banks basically profiteering."

The banks argued they needed to keep some margins in a low interest rate environment, and protect customers who save deposits.

"They'll put their explanations out there and the public will judge them based on what they say but I'm not buying it," Mr Morrison said.

Treasurer Josh Frydenberg savaged the big banks for failing to pass on interest rate cuts in full to their customers.

"Shop around, express your displeasure to your bank if they haven't passed the rate cut on in full," he told 3AW radio.

"As the Reserve Bank itself has said, the cost of borrowing for the banks has come down, the cost of their funds will come down. And that is why it should be passed on."

Opposition Leader Anthony Albanese also gave the banks a spray.

"The banks need to pass on the interest rate cut in full and the government needs to do something about it," he told reporters in Queensland.

"They can't just sit back as spectators while this occurs."

Comparison site Mozo estimates the big four banks have clung onto an extra $4.7 billion since 2016 by not passing on the full cuts.

"In making the decision, we took into account the reduction of the official cash rate and the commercial pressures of the low interest rate environment," Westpac's David Lindberg said.

The ANZ did pass on the full rate cut for people paying interest-only home loans.

The Reserve Bank is already preparing to cut rates further if the economy remains stagnant.

"The board ... is prepared to ease monetary policy further if needed to support sustainable growth in the economy, full employment and the achievement of the inflation target over time," it said.

AMP chief economist Shane Oliver predicts rates will drop again to 0.5 per cent on Melbourne Cup day, and down to 0.25 per cent early in 2020.

Deloitte Access Economics partner Chris Richardson says there are downsides to cutting rates so low.

"There is a risk that we're spending down our recession insurance," Mr Richardson told Sky News.

Australian Associated Press