The National Australia Bank (NAB), ANZ Banking Group Ltd (ANZ) and the Commonwealth Bank of Australia Ltd (CBA) have matched the central bank, increasing standard variable mortgage interest rates by 25 basis points.
National Australia Bank Ltd (NAB) was the third bank to match the central bank, increasing its standard variable mortgage interest rate by 25 basis points.
The bank's standard variable home loan rate will rise to 6.24 per cent as of Friday November 6, from 5.99 per cent, the Melbourne-based NAB said in a statement on Tuesday.
NAB will increase two deposit rate products by 25 basis points, also from Friday November 6, and a range of business loans and deposit rates by the same amount from Monday November 9.
NAB's group executive of personal banking, Lisa Gray, said the bank's variable home loan interest rate remained highly competitive.
Meanwhile, the ANZ bank's standard variable home loan rate will also rise to 6.31 per cent as of Monday November 9, from 6.06 per cent, the Melbourne-based ANZ said in a statement on Tuesday.
The Reserve Bank of Australia (RBA) increased the overnight cash rate by 25 basis points to 3.50 per cent on Tuesday - the second increase in the space of a month.
The Commonwealth Bank's standard variable rate will also rise to 6.24 per cent as of Monday November 9, from 5.99 per cent, Sydney-based CBA said in a statement on Tuesday.
CBA group head of retail banking services Ross McEwan said the bank's wholesale funding costs remain high.
"Funding pressures and market interest rates continue to be significant issues for financial institutions and today's increase reflects the costs being experienced," he said.
CBA also increased the interest rates on its NetBank Saver and Business Online Saver deposit accounts by 25 basis points.
CBA is Australia's largest home lender.
ANZ also said it was raising interest rates on a range of deposit products by 35 basis points.
A spokesperson from Westpac Banking Corporation said their interest rates were under review.
ANZ said the interest rates for credit cards and business lending would also rise by 0.25 per cent, as would other variable rate mortgage products.
"Funding costs remain high and despite improvements in credit markets the average cost of wholesale funding is increasing which is continuing to place considerable pressure on mortgage margins," ANZ chief executive for Australia Graham Hedges said in the statement.
"If sustained over time, there will be commercial pressure to pass the additional costs on.
"Right now, it's in everyone's interest that the recovery consolidates and the right thing to do at this point in the economic cycle is for us to absorb the additional funding costs."
The interest paid on ANZ's progress saver account will increase by 35 basis points to three per cent.
Together, the big four control about 85 per cent of Australia's mortgage market.
Regional lender Bendigo and Adelaide Bank Ltd said its interest rates were also under review.
© 2009 AAP
