The Westpac-owned St. George Bank has cut its two-year fixed rate mortgage by 40 basis points, in view of the latest sign of weakening expectations that rates will be raised.

It lowered the interest rate to 7.14 per cent from 7.54 per cent yesterday, according to rate tracking service, Mozo. com. au.

The fall came the day after the Reserve Bank decided to keep the benchmark cash rate steady at 4.5 per cent, where it has been, since May. Community CPS, a national credit union, cut the rates on all of its fixed-year mortgages between 5 and 15 basis points, yesterday.

Fixed rate mortgages, based on the future expectation of bank funding costs, are perceived as an indirect gauge of upcoming official RBA rate moves.

"The general trend downwards suggests further rate rises are less likely", said, Rohan Gamble Managing Director of Mozo. com. au.

Investors have shrugged off economists' warnings of additional rate hikes in near future and debt markets are presently betting in no change to the interest rate over the next 12 months, according to Credit Suisse data.

Macquarie interest rate strategist, Rory Robertson said that interest rate markets were no longer positive of another phase of rate increase by the Reserve Bank.

The moves by St. George and Community CPS come after cuts to fixed-rate mortgages by ANZ Bank, AMP, Commonwealth Bank, CBA-owned BankWest, ME Bank, St. George-parent Westpac and mecu.