Major banks announce interest rate increase after Reserve Bank lifts cash rate by 0.25 per cent

Australia's Big Four banks have announced interest rate rises following the Reserve Bank of Australia's decision to increase the national cash rate.

The RBA board's announcement today took the country's interest rate to 4.1 per cent, an increase of 0.25 per cent.

NAB announced this afternoon it would raise its home loan variable interest rates by 0.25 per cent per annum, effective March 27.

NAB group executive, personal banking, Ana Marinkovic, said the bank was aware a rate increase would be "challenging for many Australians".

"Particularly in the context of ongoing cost-of-living pressures," she said.

"Many customers have built buffers over time by paying more than the minimum when they can, which can provide some breathing room as rates rise. But we know that won't be the case for everyone."

She encouraged customers who felt under pressure to contact NAB "as soon as possible".

Westpac said it would increase its own home loan variable interest rates by 0.25 per cent per annum for new and existing customers, effective March 31.

Deposit customers would have their Westpac Life total variable rate with bonus interest increased by 0.25 per cent per annum, effective March 27.

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

"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.

Commonwealth Bank, meanwhile, said it would increase home loan variable interest rates and eligible variable-rate business loans by 0.25 per cent.

Both changes would be effective as of March 27.

CBA's retail banking group executive, Angus Sullivan, said the bank's priority was ensuring customers were supported.

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

ANZ said it would also increase variable home loan interest rates by 0.25 per cent per annum, effective March 27.

It noted it was still reviewing other interest rates.

ANZ's Australia retail group executive, Pedro Rodeia, said ANZ recognised "the pressure higher home lending rates can place on household budgets".

"Customers who might be concerned about their repayments are encouraged to get in touch with us early," he said.

Macquarie Bank also announced it would make changes to interest rates across its variable home loan and deposit products.

Its variable interest rates on transaction and savings accounts would increase by 0.25 per cent per annum, along with its variable home loan reference rates.

The change would come into effect from April 2.

Macquarie's head of personal banking, Ben Perham, said the bank understood the interest rates hike was "unwelcome news" for many mortgage holders.

"But we want our customers to know that we're in your corner," he said.

"In February, many banks chose to pass on higher home loan rates in just days, while we took a different approach.

"We were the slowest of the major banks, waiting over two weeks so our customers had more time to adjust and plan their finances."