Banks rush to pass on rate cut Home lenders have rushed to pass on a politically charged Reserve Bank interest rate cut which trimmed the official cash rate to the lowest level in the modern era. The .25 percentage point rate reduction pushed home lending rates towards the record lows registered during the global financial crisis. Just three minutes after the Reserve's announcement, the National Australia Bank passed on the rate cut in full. Westpac then reduced its standard variable rate by .28 of a percentage point, more than the Reserve's cut. The Commonwealth Bank, along with several other lenders, reduced home lending rates in line with the official move. ANZ will review its lending rates on Friday. The rate cut. The interest rate cut will save borrowers with a typical $300,000 mortgage about $50 a month. The Reserve has now reduced the official cash rate by 2.25 percentage points since November 2011 to 2.5 per cent, the lowest since 1959. At that time the Australia's central bank was not formally independent as it is today. Reserve governor Glenn Stevens said Tuesday's move was necessary because of slower-than-average economic growth after the mining boom. "The economy has been growing a bit below trend over the past year," he said. This is expected to continue in the near term as the economy adjusts to lower levels of mining investment. Mr Stevens said the unemployment rate was rising and that inflation was expected remain in check for the next one to two years. Although the Australian dollar has depreciated by about 15 per cent since early April, Mr Stevens said "it remains at a high level." "It is possible that the exchange rate will depreciate further over time, which would help to foster a rebalancing of growth," he said. Mr Stevens' statement gave no hints on the direction of interest rates and the dollar rose a little after the rates announcement. The Reserve will update key economic forecasts when it releases its quarterly statement on monetary policy on Friday. Before the Reserve cut interest rates, new house price data showed low borrowing costs were already helping to buoy the property market. National house prices rose 2.4 per cent in the June quarter to be up 5.1 per cent for the year, the Bureau of Statistics said. Mr Stevens said recent interest rate cuts had "supported interest-sensitive spending and asset values, and further effects can be expected over time." Some analysts warned that very low interest rates could spark an unsustainable boom in house prices. Mr Stevens acknowledged there are signs of higher demand for finance by households but said the "pace of borrowing has remained relatively subdued."