Westpac and NAB also hike rates above RBA increase

Westpac and NAB have become the latest banks to raise interest rates on home loans by more than the Reserve Bank's (RBA) 0.25 per cent increase announced last week.

The moves mean that all of the "big four" banks have now raised rates by more than the RBA's official hike after the Commonwealth Bank and ANZ lifted their standard variable rates by 45 and 39 basis points, respectively.

Westpac chose to raise rates by 35 basis points to 7.86 per cent while NAB said it was raising rates by 43 basis points to 7.67 per cent.

NAB also announced that it would follow ANZ by abolishing its $900 early exit fee on home loans from December 6th.

The Commonwealth Bank and Westpac have not yet revealed any changes to their mortgage exit fees.

Such moves by the banks could prompt more borrowers to compare home loans in search of better deals. Commenting on the latest rate rises, shadow treasurer Joe Hockey argued that home buyers were paying the price for having a weak and ineffective government.

"It goes to show that when [treasurer] Wayne Swan boasts of ringing up the bank chief executives after the Commonwealth Bank's increased rates that those phone calls were meaningless – they were disregarded, forgotten within minutes," he said.

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