The Commonwealth Bank is the first major bank to announce an increase in mortgage rates, matching the Reserve Bank's 25-basis-point increase from May 20.

The RBA raised official interest rates for the first time in more than a decade to curb surging inflation, with the cost of living up 5.1 per cent over the past year. 

The CBA said it would raise home-loan variable interest rates by one quarter of a percentage point, in line with the RBA's increase.

That brings the standard variable interest rate for owner-occupiers paying principal and interest to 4.8 per cent.

The equivalent home-loan rate for investors will increase by 25 basis points as well, to 5.38 per cent.

ANZ also announced it would pass the full amount on to home loan customers.

For standard variable rate owner-occupiers paying principal and interest, the index rate will change to 4.64 per cent, from 4.39 per cent.

The bank said that this would increase monthly repayments by $57 a month on a $450,000 home loan. 

For those on interest-only loans, the interest rate will rise to 5.19 per cent. 

ANZ said the new rates will take effect from May 13.

RateCity research director Sally Tindall said other banks were likely to follow suit.

"It's now just a matter of time before the other big banks follow, and it's likely they'll also hike rates by the full 0.25 percentage points," she said.

According to RateCity, when the banks pass on the rate lift in full, the average borrower with a $500,000 loan and 25 years remaining will see their repayments rise by $65 a month.

Someone with a $1 million loan will see their repayments rise by $130.

However, both CBA and ANZ did not announce any changes for savers, and Ms Tindall said that's "a worrying sign."

“Both CBA and ANZ have not yet indicated what they intend to do with their deposit rates, and that could spell bad news for savers," she said.

Westpac followed, saying it would increase home loan variable interest rates by 0.25 per cent for new and existing customers from May 17.

The company said it would also increase interest rates for selected consumer deposit accounts, including Westpac Life, Westpac 55+ and Retired, by 0.25 per cent.

NAB is expected to announce its pricing decisions on Wednesday.

'Market remains extremely competitive'

It's estimated that more than one million home owners have never experienced a rising interest rate.

Even with a rate rise, competition would still remain strong in the variable rate market.

"The market remains extremely competitive," David Zammit, national sales director from Mortgage Choice, said.

Homestar Finance announced it would keep its lowest rate for new customers of 1.79 per cent unchanged.

Reduce Home Loans has also said it would offer at least one variable rate under 2 per cent.

Experts expect more lenders to keep at least one variable rate under 2 per cent for their new customers.

While the official cash rate lift was relatively small, economists say it's likely to see a series of interest rate rises before the end of the year.

CBA predicted that cash rate could hit 1.6 per cent in February 2023, before going on hold. 

"We then expect a further 25 basis point rate hike in February 2023 that would see the cash rate target at 1.60 per cent.

"From there we have the key policy rate on hold over 2023."

Westpac previously predicted the cash rate could rise to 2 per cent by May 2023. 

If that happens, the average borrower with a $500,000 debt could see their repayments rise in total by around $511 by May 2023.

“Increases to repayments may not sound like a big stretch, but with wage growth having fallen behind the cost-of-living rate increases will add to the financial pressure on many households," Steve Mickenbecker, Canstar’s finance expert, said.