Westpac joints CBA and NAB by passing on 20 basis points

Westpac  will pass on 20 basis points of the RBA's 25 basis point cash rate cut to borrowers.

It's standard variable rate will reduce to 6.51% from December 17.

It follows both NAB and Commonwealth Bank announcing rate cuts of 20 basis points, taking effect from December 10.

NAB's new standard variable rate will reduce to 6.38% and Commonwealth Bank's will fall to 6.40%.

Westpac taking an extra week to reduce its variable rates compared with the Commonwealth Bank and NAB is significant.

Earlier this year, The Australia Institute calculated that every day that the big four banks delay passing on the Reserve Bank’s latest interest rate cut represents a deprivation of $12 million from home owners’ pockets.

Westpac is taking 12 days to pass on 20 basis points this month compared with a big four bank average of 10.6 days calculated by the Economic Record, published by the Economic Society of Australia.

In contrast, NAB and the Commonwealth Bank will take only five days to pass on the rate cut.

ING Direct announced yesterday it would pass on the full rate cut, but this will only take effect on December 24 - 19 days after the RBA reduction.

Westpac's reduction in home loan rates will save homeowners $38 a month or $456 a year in total monthly repayments on an average mortgage of $300,000.

Since October 2011, Westpac has cut its variable mortgage rates by 1.35 percentage points, equating to an annual saving of $3,192 on an average home loan.

The RBA has reduced the cash rate by 175 basis points since October.