Westpac follows CommBank, cutting interest rates
WESTPAC has followed CommBank's lead, passing on interest rate cuts made by the Reserve Bank on Tuesday.
Like CommBank, Westpac's changes won't come into play until February 20.
See more detail on CommBank's cuts below
Westpac's standard variable rate will fall to 5.70%, down 0.28% -- its lowest headline rate since April 2009.
However, those on the bank's "Premier Advantage Package" will likely move down to its discount rate of 5%.
The reduction means homeowners will save about $52 a month or $624 a year on a mortgage of $300,000.
Westpac also has discount fixed rates for two years at 4.84% or 4.94% for three years.
CommBank has its 'lowest ever' fixed rates after cut
THE Commonwealth Bank will pass on lower interest rates after the Reserve Bank brought down national rates by 0.25% to 2.25% -- the lowest ever.
In a statement this morning CommBank announced it would match the RBA's cut on its standard variable rate, bringing it down to 5.65%.
It now sits at its lowest since April 2009.
For the average mortgage of $300,000, the change amounts to a saving of $48 a month
Both its three-year and five-year fixed rate mortgage rates have been cut down to 4.69% -- amounting to a cut of 0.25% and 0.30% respectively.
These are the lowest fixed rates ever offered, according to the bank.
Since November 2011, CommBank's variable rates have fallen 2.16 percentage points, the equivalent saving of $5160 a year for a home loan of $300,000
Treasurer expects banks to pass on rates cut immediately
INTEREST rates have reached record lows, with the Reserve Bank on Tuesday cutting the cash rate to 2.25%, the first change in 17 months.
The rate cut brought the nation's cash rate to the lowest point since the 1990s when the RBA was given the ability to change interest rates to fight inflation.
After the extended period of stability in the cash rate, RBA Governor Glenn Stevens said the change was prompted by continued falling commodity prices, moderate global growth and estimates of below-trend domestic growth.
Mr Stevens wrote in the meeting minutes that domestic demand remained "overall quite weak", predicting below-trend growth for "somewhat longer" and a higher unemployment rate peak than earlier forecast.
"The fall in energy prices can be expected to offer significant support to consumer spending, but at the same time the decline in the terms of trade is reducing income growth," Mr Stevens wrote.
He said the board expected the quarter of a percentage point cut would help support more demand in an effort to "foster sustainable growth and inflation outcomes".
Treasurer Joe Hockey says he expects the banks will move quickly to pass on the cuts.
"In fact the Bank of Queensland has already moved and I congratulate them for that. But I also expect this to be passed through, particularly for small business owners and to be passed through for everyone that has a credit card. We expect this to cut through right across the spectrum of credit," he said.
It is the first time RBA has cut rates since August 2013.