Master Builders Australia, the peak building and construction industry, has called on the banks to pass on in full the 100 basis point reduction in the cash rate by the central bank.

The group said there is no case for the banks to withhold the benefits of lower interest rates to both households and builders.

An hour after the Reserve Bank of Australia had cut the cash rate to 3.25 per cent, from 4.25 per cent, on Tuesday just one bank, Westpac Banking Corp, had passed on the reduction.

Other banks said they were reviewing their standard variable rates.

“Provided the banks pass on today’s cut in full, reductions in mortgage interest rates since the RBA began lowering official rates in September 2008, will mean a $700 reduction in monthly payments on an average new housing loan,” Master Builders Australia chief executive Wilhelm Harnisch said in a statement.

“The housing market should benefit from the massive drop in mortgage rates as well as the Government’s Nation Building and Jobs Plan and community housing initiatives, and the $21,000 boost scheme for First Home Owners.”