Westpac has become the first major bank to react to the Reserve Bank’s rate cut, announcing it will pass on the savings in full to home loan and small business customers.

The 0.25 per cent reduction in rates means an owner-occupier with a standard variable home loan of $400,000 will save an extra $60 per month, or $720 per year, Westpac said.

“We recognised that COVID-19 will have a direct impact on our nation’s economy and we want to provide additional support to our small business and home loan customers at this unprecedented time,” Westpac consumer CEO David Lindberg said.