Westpac outcuts the Reserve Bank Banks jump to cut rates NAB, Westpac and CBA have reacted swiftly to today's Reserve Bank interest rate reduction, passing on the cut in full says business reporter Clancy Yeates. Westpac customers will receive a bigger cut in their mortgage rates than the Reserve Bank's official reduction, after the bank said would cut home loan interest rates by 0.28 percentage points. The country's second biggest bank, which has had the highest advertised rates of the big four for several years, today said it would cut its standard variable interest rate to 5.98 per cent. Rate cuts aren't a silver bullet in isolation, but they contribute to increasing confidence. Westpac's move follows 0.25 per centage point cuts by Commonwealth Bank and National Australia Bank, which cut within minutes of the Reserve Bank's decision to lower the cash rate to 2.5 per cent, from 2.75 per cent. ANZ will announce its change in mortgage rates this Friday. If it follows its peers and passes on at lest 0.25 percentage points in cuts, Westpac will still have the highest advertised mortgage rates among the big four. Other lenders including ING Direct, ME Bank, Newcastle Permanent, and Westpac-owned St George and Bank of Melbourne will also pass on the 0.25 percentage point cut. Westpac's executive in charge of retail and business banking, Jason Yetton, said its move to out-cut the RBA was designed to boost confidence, amid signs of a recovery in housing. "The latest consumer surveys have shown that confidence is the key to our customers" well-being and we believe that what we have announced today will help support growth in the housing sector as well as improve the faith in Australia's economic outlook," Mr Yetton said. CBA, the country's biggest mortgage lender, said it would cut its standard variable mortgage rates by 0.25 percentage points to 5.9 per cent. The bank said it was forced to balance the interests of people with deposits, loans and its many shareholders. "The Commonwealth Bank believes this is a balanced decision, and takes into account both domestic and offshore factors," said Matt Comyn, who runs its retail banking division. The cut means CBA has the second lowest SVR of the big four after NAB. Within minutes of the RBA's decision, the National Australia Bank cut its standard variable interest rate to 5.88 per cent - which it said was the lowest in four-and-a-half years. Bank of Queensland has also cut its standard variable rate by 25 basis points to 6.01 per cent. BoQ chief executive Stuart Grimshaw said the a quick decision was especially important for business customers in the current environment. "Rate cuts aren't a silver bullet in isolation, but they contribute to increasing confidence and a quick decision from us is just one way we can help provide some certainty to our customers," he said. ANZ will make its decision at its monthly rate meeting on Friday. Mark Bouris' mortgage lender Yellow Brick Road, which is backed by Macquarie Group, also cut its "rate smasher" mortgage rates by 0.25 per cent to 4.75 per cent. While the big banks typically offer customers a discount of 0.7 to 1 percentage point off their standard variable rates, Mr Bouris is trying to push for a more transparent rate market. With today's cut so far passed on in full to mortgage customers, federal Labor's election campaign is tipped to receive a boost from the reduction in borrowers' cost of living. Treasurer Chris Bowen seized on the news, saying monthly mortgage repayments on a $300,000 loan were now $500 lower than when the Coalition was in power. "The reality is interest rates are now lower - under Labor - than they ever were under the Coalition and Mr Abbott," Mr Bowen said. The Coalition has argued that rate cuts are a sign of economic weakness, not strength. Labor's argument is similar to one made by John Howard in his successful election campaign against Mark Latham. Who do you trust to keep interest rates low? Mr Howard said in 2004.