Bank Australia and Bank of Sydney are passing on the full 0.25 percentage points cut to the cash rate made by the Reserve Bank on Tuesday, which took the cash rate to a new record low of 1.5 per cent.

Kirsty Lamont, a director of comparison site Mozo, says big-bank customers need to pick up the phone and ask their bank to pass on a bigger cut.

"If the bank won't come to the party it's time to start shopping around. But it's worth waiting to see what rates other lenders offer to make sure you're getting the best deal out there after the rate cut," she says.

Bessie Hassan, money expert at Finder, says borrowers are fed up with partial cuts being passed on by the banks.

"In the past two years the cash rate has dropped four times but the big banks haven't kept pace," she says.

Finder figures show that while the cash rate has dropped by 1 percentage point over the past two years, the average variable-interest-rate cut of the big four banks was only 0.53 percentage points.

Justine Davies, editor-in-chief of comparison site Canstar, says while most home loans are with one of the big four banks, there are at least 100 other lenders.

Even with the official cash rate now at 1.5 per cent, there is still a difference of 2.25 percentage points between the highest and lowest variable home loan interest rates on Canstar's database, Davies says.

"Even after the announced reductions, the standard variable-home-loan rates of the big four are sitting at around 5.2 to 5.3 per cent.

Shop around

Davies says mortgage holders can certainly negotiate with their bank to get a bigger discount, but it is definitely worthwhile looking at other lenders.

"We are expecting to see a handful of variable-home-loan rates drop below 3.5 per cent over the next month," she says.

Peter White, the head of government, media and strategy at Finance Brokers Association of Australia, warns mortgage holders about simply allowing their lender to lower repayments and spending the freed-up cash on discretionary items.

Mortgage holders should maintain current repayment levels so as to eat into the debt more quickly, he says.

It also leaves a buffer so that future rate rises will not put the family finances under strain, he says.

"I have been around long enough to know these rates won't last and there are already enough economic indicators to show 2017 may well see a steady rise in official rates," White says.

Justine Davies agrees. While everyone focuses on the loan repayment savings, it is smart strategy to keep your repayments at the same level, she says.

When the Reserve Bank eventually starts to increase the cash rate the full impact will be felt by mortgage holders, she says.

That is because increases in the cash rate tend to be handed on, in full, to mortgage holders.

Fixed option

Fixed-interest rates are looking attractive compared to variable rate after lenders starting cutting their fixed rates during July in anticipation of cuts in the cash rate.

Canstar figures show that just before the latest rate cut that the average standard variable rate was 4.55 per cent and the average three-year fixed rate was 4.18 per cent.

Finder's Bessie Hassan expects more borrowers to take fixed-rate home loans now that rates have sunk to what many believe will be the low of this rate-cutting cycle.

She says more home-loan customers are likely to opt for either a fixed mortgage or split between variable and fixed rates.

"Those who are torn about whether to fix their home loan might consider fixing part of their loan and leaving part variable. This way, you can get the best of both worlds," she says.

"While a variable rate enables you to benefit from any further fall in interest rates, a fixed rate gives you security and peace of mind," she says.

Hassan says for those borrowers considering fixing their mortgage, it's important to shop around because rates and fees can vary significantly between lenders.

"Once you are locked into a fixed home loan, it can be very hard and expensive to switch so find the best deal from the outset," she says.

Twitter: @jcollett_money