Big four banks pass on rate rises to mortgage holders after RBA decision

All of the big four banks have immediately passed on to mortgage holders the Reserve Bank of Australia's increase to the cash rate of 0.25 per cent.

Just hours after the decision was announced by RBA Governor Michelle Bullock, the Commonwealth Bank, National Australia Bank, ANZ and Westpac told their customers they would be passing on the increase.

NAB group executive Ana Marinkovic said the bank recognised the added pressure it would add to households who were coming to terms with February's rate rise and were battling higher inflation and petrol prices.

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Debit cards from the big four banks - Commonwealth Bank, NAB, Westpac, ANZ

"We know another rate increase will be challenging for many Australians, particularly in the context of ongoing cost-of-living pressures," she said.

She said many customers had anticipated this and built a safety net, she conceded "that won't be the case for everyone".

Westpac followed suit, announcing its home loan interest rates would increase by 0.25 per cent, but also increasing the interest rate to their customers with savings accounts – something NAB did not announce.

"With overseas conflict impacting inflation and cost of living, we know these are uncertain times for many of our customers," Westpac chief executive consumer Carolyn McCann said.

"We are here to help and if customers are concerned, we urge them to contact us as early as possible so we can talk through the support options available."

The Commonwealth Bank said all home loan variable rate changes will be effective on March 27.

"We recognise interest rate changes can put additional pressure on household budgets and influence how people plan and manage their finances," CBA group executive Angus Sullivan said.

ANZ group executive Australia retail Pedro Rodeia said concerned customers should contact the bank.

"Customers who might be concerned about their repayments are encouraged to get in touch with us early. Our team is ready to provide support, guidance and access to a range of tools to help customers manage their finances," he said.

The RBA made the decision for a second straight rate increase in a 5-4 vote. Bullock said there was "robust discussion" between members.

However, she insisted this was not about making the decision itself, but about whether this was the right time, as she said this was the only decision they could make to cut down on inflation.

"The direction wasn't the issue," she said.

"Higher petrol prices will add to inflation, but they're not the reason for today's decision … Inflation was already too high."

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