News: UPDATE 1-National Australia Bank, Westpac to cut mortgage rates by 25 bps

• NAB to cut mortgage rates from May 16
• Westpac to cut mortgage rates from May 23
• Central bank cuts official rate by 25 basis points

(Adds Westpac rate cut)

SYDNEY, May 3 (Reuters) - National Australia Bank (NAB) said on Tuesday that it will cut variable home loan rates by 25 basis points following the central bank's move to lower the cash rate by a quarter point to an all-time low of 1.75 percent.

The cut, effective May 16, will pull NAB's variable home loan rate down to 5.35 percent, it said. The nation's No.1 lender will also reduce its variable business lending rates by 25 basis points.

Australia's No.3 lender Westpac Banking Corp (WBC) followed suit, saying it would cut variable home loan and residential investment property loan rates by 25 basis points effective May 23.

Australian banks raised a record A$20 billion ($15.13 billion) in equity last year to meet stricter capital rules and passed on the costs by raising lending rates to protect margins and shareholder returns. ($1 = 1.3221 Australian dollars)