Australia news LIVE: RBA cuts interest rates for first time in more than four years to 4.1 per cent; ACCC gives the go ahead to Virgin-Qatar alliance

Westpac, National Australia Bank and the Commonwealth Bank of Australia will pass on the rate cut to mortgage holders, moving straight off the bat to act on interest rates after the Reserve Bank decreased the official rate for the first time in almost five years.

The nation’s three largest lenders will cut the variable interest rates by 25 basis points, effective from February 28.

Westpac said it would also cut interest for deposit customers by 0.25 percentage points, while CBA said it would maintain its current 10-month term deposit special of 4.6 per cent for a limited time.

Westpac consumer chief executive Jason Yetton said the decision was welcome news for mortgage customers.

“By reducing the standard variable home loan rate by 0.25 per cent per annum, customers will save an extra $90 per month, or $1,080 per year, based on a $500,000 home loan with principal and interest repayments,” he said.

NAB chief Andrew Irvine said the high-interest rate environment had been challenging for some households, particularly those with young families.

“I think this rate reduction will really ease some of the burden,” he said.

CBA retail banking services group executive Angus Sullivan strongly encouraged anyone experiencing hardship to contact the bank so it can help with a solution that suits their circumstances.

“We recognise some customers will continue to need support as they manage household budgets,” he said.

Westpac said it would also cut interest for deposit customers by 0.25 percentage points, while CBA said it would maintain its current 10-month term deposit special of 4.6 per cent for a limited time.

NAB said its interest payments for customer savings were under review.