Small lenders have passed on the RBA's rate cut in full.

Home-loan lenders are heating the competition as they pass on the cash-rate cut in full.

The Reserve Bank of Australia decided to slash the official cash rate to a historic low of 0.75%. Big banks refused to pass on the full 25-basis point cut, citing profit-margin issues.

Also read: Treasurer urges banks to pass on rate cut in full to home-loan borrowers

Given the current environment, smaller lenders are attracting potential borrowers with bigger rate discounts. For instance, UBank decided to pass on the 25-basis point discount, bringing its standard variable rate to 2.84%.

Athena Home Loans also repriced its home-loan product to reflect the RBA's recent move. The lender is planning to slash its standard variable interest rate to 2.84% for owner-occupiers with principal-and-interest-rate loans and to 3.24% for investors.

Joining the trend is Auswide Bank, which reduced the mortgage rate of its RBA Rate Tracker Home Loan. Its owner-occupier clients with principal-and-interest-rate payments will enjoy a lower mortgage rate of 3.24%.

Freedom Lend and Homestar Finance also announced 25-basis-point cuts, bringing their respective variable rates to 2.79% and 2.74%.