Two of the big bank that you need to know

NAB’s two year rate will lift by 23 basis points to 3.98 per cent, its three-year rate will rise 20 basis points to 4.09 per cent, and its four-year rate will jump 60 basis points to 4.59 per cent. At the same, NAB is reducing its one-year rate by 10 basis points to 3.89 per cent.

On Friday, ANZ increased rates on two-year loans by 23 basis points to 3.9 per cent, and three-year loans 4 per ent. ANZ reduced its four year fixed rate by 10 basis points to 4.74 per cent.

The banks are hiking rates for both owner-occupier loans and loans for property investors. These changes will only new fixed loans, not existing borrowers.

Even so, there has been speculation among analysts that banks may also increase their variable interest rates that most borrowers pay in 2017, in response to higher funding costs.

The big four all raised variable interest rates for property investors in the lead-up to Christmas, but spared owner-occupiers who are a more politically sensitive group of customers.

However, smaller banks have increased variable rates for owner-occupiers, and NAB’s chief operating officer, Antony Cahill said the funding costs for variable loans remained above historical averages.

“We often talk about cost of funds when we are referring to our variable rate mortgages. What I can say is the cost of funds for those mortgages absolutely remains elevated compared to historical levels,” Mr Cahill told BusinessDay.

“That is something we are continuing to see, and it’s something we’re still grappling with in working through how we reflect that longer term in terms of competitive positioning and pricing, etc.”