While the major banks are keeping their customers, and each other, wondering about their approach to repricing assets and liabilities in the wake of yesterday's cut of 25 basis points in Australia's official cash rate, a couple of smaller lenders made sure they cut home-loan rates promptly in line with the RBA.Bank of Queensland and ME Bank both announced cuts of 25 bps. These were the only rate reductions publicised late yesterday.BOQ's cut, to 7.36 per cent, will apply from 16 December. ME Bank said its new standard home-loan rate will be 6.74 per cent, but it has yet to set the date from which this will apply.Typical home-loan rates from lenders, which take into account advertised and less formal discounts from the "standard" rates, fall somewhere between the new pricing points of BOQ and ME Bank.Between them, the two banks account for around three per cent of the home-loan market. The major banks account for more than 80 per cent of the market, and closer to 90 per cent when measured by new business.Both BOQ and ME Bank are looking for a lift in new business levels. BOQ's home loan growth over the last few months has been around half overall home-loan credit growth, while ME Bank has seen its mortgage book decline in dollar terms over the last year.In the case of BOQ, a cut in home-loan rates need not affect the bank's net interest margin.Stuart Grimshaw, managing director of BOQ, said that "for home loans, the margin will be compressed, but that's just a portion of our business."Grimshaw said BOQ would look to maintain interest margins across its business.When asked about the impact of the increased cost of funds in international markets on BOQ's funding, Grimshaw said: "We are barely in the international market. We have only A$300 million in unsecured, long-term debt."At the moment our deposit book is more than funding our loan growth."Jamie McPhee, managing director of ME Bank, conceded that the bank's long-term cost of funds was higher."We did a securitisation deal two months ago at 125 basis points over [bank bill swap], and that compares with 100 basis points over earlier the year.""That's our access to long-term funding. For us, it's retail and securitisation."Of pricing trends in the retail market, McPhee said: "I am in the camp that says it's pretty intense. In term deposits it's still 100 to 150 basis points over cash. There's still strong competition."