Two of the big four banks have moved to increase their variable home loan rates following the central bank's decision to lift the official cash rate.
The Reserve Bank of Australia raised the rate by 50 basis points to 1.35 per cent on Tuesday, marking the third consecutive rise in a row.
ANZ followed the lead of the Commonwealth Bank on Wednesday in passing the rise on in full by increasing rates on variable home loan products.
NAB and Westpac have yet to make announcements, but are expected to follow suit.
The new rates for Commonwealth Bank customers will come into effect from July 15, with the standard variable rate for owner-occupied borrowers rising by 0.50 per cent to 5.90 per cent per annum.
Rates on other products have risen to 6.20 per cent, 6.38 per cent and 6.64 per cent.
Meanwhile, ANZ also announced it would increase the bonus interest rate on some of their savings accounts by 0.5 per cent.
ANZ said the 0.5 per cent change will increase monthly repayments by $119 on an average home loan of $450,000 for an owner occupier paying principal and interest.
RateCity said the rise would add $137 a month to a $500,000 mortgage, or $499 per month to a $750,000 loan.
The central bank board also flagged further rises, with some economists expecting the cash rate to hit 3.5 per cent next year.
The Reserve Bank is planning a series of rate rises to get inflation back to its two to three per cent target band.
"The board is committed to doing what is necessary to ensure that inflation in Australia returns to target over time," Reserve Bank Governor Phillip Lowe said in a post-decision statement.
Inflation is sitting on 5.1 per cent and is expected to head towards seven per cent over the course of this year.
Treasurer Jim Chalmers on Wednesday warned of tougher economic times ahead.
"It is going to be an incredibly difficult period for people, they should brace themselves for high and rising inflation and more rising interest rates, unfortunately," he told ABC Radio.
"But things will get better. It's the expectation of the Reserve Bank ... that inflation will moderate next year. It will come back down to more normal levels, that will obviously be a big release to people."
Dr Chalmers is expected to provide an economic update when federal parliament resumes at the end of the month, before handing down his first budget in October.
"The budget will be all about implementing an economic plan, which includes things like investment in skills, cleaner and cheaper energy, and more affordable childcare," he said.
"If you're the treasurer in a new government, you need to focus on the things that you can influence.
"The constraints we have in our economy have been building for the best part of a decade."
The treasurer said while Australia was not expected to enter a recession, there could be economic consequences should that happen in the US.
"They've got higher inflation, and they've got a central bank that's going to have to do a lot of work to try and rein that inflation in," Dr Chalmers said.
