At its monthly board meeting yesterday, the RBA judged it was appropriate to reduce the official cash rate to 2.75 per cent.
Less than one hour after the decision was made, National Australia Bank, the Commonwealth Bank of Australia and Westpac had all announced they would pass on the full rate cut to borrowers.
CBA’s group executive, retail banking services, Matt Comyn said the rate cut would take the major’s standard variable rate (SVR) to 6.15 per cent.
"The Commonwealth Bank believes that this is a balanced decision taking into account both domestic and offshore factors,” he said.
National Australia Bank also trimmed 25 basis points from its SVR, taking the new rate to 6.13 per cent.
Similarly, Westpac passed on the full 25 basis point rate cut, taking its SVR to 6.26 per cent – the lowest rate the lender has offered since November 2009.
The NAB and CBA cuts are effective May 13; Westpac's is effective May 20.
But it wasn’t just the major banks that were quick to pass on the rate cut in full; ING DIRECT was also not slow off the mark.
From May 17, the lender’s most popular home loan, Mortgage Simplifier, will boast an interest rate of 5.47 per cent.
ING DIRECT’s decision did not come as a surprise, with the bank one of the few lenders to consistently pass on the RBA’s cash rate cuts in full.
In December last year, ING DIRECT was one of just three lenders amongst the non-major and major lenders to do so.