Westpac Banking Corporation, Australia’s second biggest home-loan lender, will pass on the full central bank rate cut but other banks are still reviewing their lending rates.

The bank will cut its standard variable mortgage rate by 100 basis points to 5.91 per cent, Sydney-based Westpac said in a statement on Tuesday.

Westpac will also reduce its business lending rates by 100 basis points and cut its Altitude, Altitude Business and 55-day credit card rates by the same margin.

The move came after the Reserve Bank of Australia cut, as widely expected, the overnight cash rate on Tuesday by 100 basis points to 3.25 per cent, its lowest level since 1964.

Prime Minister Kevin Rudd urged banks to pass it on in full, but so far Westpac is the only bank to do so.

Westpac made its announcement about 45 minutes after the RBA announcement - its fifth cut to interest rates since September last year.

In December, three of the big banks had announced cuts to their mortgage rates within 15 minutes of the RBA’s cut to rates.

Treasurer Wayne Swan said on Tuesday he welcomed Westpac’s decision to pass on in full the RBA’s latest interest rate cut.

“We do expect other banks to pass this rate cut on in a timely way,” Mr Swan told parliament.

Westpac retail and business banking group executive Peter Hanlon said wholesale markets remained challenging.

But Westpac was “pleased to support our customers in these difficult economic times” with the full reduction in the RBA’s cash rate, he said.

Mr Hanlon said average monthly repayments on a $250,000 mortgage would drop by $158 per month.

The bank is also offering 5.49 per cent on its three-year fixed-rate home loan.

Westpac has about 26 per cent of Australia’s home loan market after taking over St George last year, according to Australian Prudential Regulation Authority (APRA) figures.

The home and business loan rate reductions will be effective on February 9, while the credit card interest reductions will happen on February 12, Westpac said.

The other three big banks, as well as the three regional lenders, say they are reviewing their rates.

CBA is Australia’s biggest home loan lender with about 28 per cent of the market, according to the APRA.

Both NAB and ANZ have about 16 per cent of the home loan market.

Spokespeople from Suncorp-Metway Ltd, Bendigo and Adelaide Bank Ltd and Bank of Queensland Ltd also said their respective rates were under review.

Since September, Australia’s big four banks have passed on a portion of the combined rate cuts to their home loan customers and highlighted high costs of term funding offshore as a reason why they could not pass on the rate cuts in full.

The interest rates applying to standard variable home loans currently stand at 6.91 per cent at ANZ Banking Group, 6.74 per cent at NAB, and 6.23 per cent at CBA.

AAP