Westpac Banking Corporation has became the second of the four major banks to its cut its home loan rate after this week’s bigger than expected easing in monetary policy.

Westpac said today it would cut its standard variable mortgage rate by 65 basis points to 7.71 per cent, effective from Monday, November 10.

Westpac followed the Commonwealth Bank of Australia (CBA) to reduce its mortgage rate after the Reserve Bank of Australia announced yesterday it would reduce the overnight cash rate by 75 basis points to 5.25 per cent.

CBA said yesterday it would lower its variable home loan interest rates by 58 basis points.

Westpac said today it would also reduce interest rates on consumer credit cards and business credit cards as much as 0.8 percentage points, from 14 November.

“Westpac is sensitive to the challenges being faced by many working families,” Westpac group executive, retail and business banking Peter Hanlon said.

“However, we are still having to meet substantially higher funding costs.

The bank said that small business owners in particular would benefit from reduced credit card interest rates.

Federal Treasurer Wayne Swan has urged banks to think of their customers and pass on the latest official interest rate cut in full.

Mr Swan said the retail banks had benefited from the certainty provided by the federal government’s move to guarantee deposits.

He said the banks had been told they could return the favour by passing on interest rate cuts in full.

The banks have said that they cannot pass on the RBA interest rate cuts in full until the cost to the banks of obtaining their own funding - made more difficult and expensive by tight global credit markets - came down.

AAP