“The cost of funding has skyrocketed as central banks around the world hike official rates to drive down inflation. The aggressive discounts we’ve seen in recent months to attract new business is becoming increasingly difficult for the banks to sustain,” Tindall said.

Alongside the rises, which did not affect existing borrowers, ANZ and CBA have also in the past week announced changes that mean the lowest rates on certain products are reserved for loans with LVRs of 60 per cent or less. Previously, the lowest rates on these products were for loans with LVRs of 70 per cent or less.

Mortgage competition has intensified in response to the sharp rise in interest rates since May last year, as more customers have shopped around, and banks have tried to expand their portfolios in a slowing market.

On Tuesday, Commonwealth Bank chief executive Matt Comyn said there had been “some changes to pricing” in recent weeks, but emphasised he was not giving a future indication of the bank’s intentions in this area.

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Westpac chief executive Peter King, speaking at the same event as Comyn, said the current market dynamic was “very good for the customer”. “It’s the most competitive market I’ve seen in mortgages in my career,” King said at the Australian Financial Review’s banking summit.

Portfolio manager at Opal Capital Omkar Joshi did not read too much into the recent changes in loan pricing, and said competition would remain strong in home loans because banks needed to chase growth by using price. “I think that competition is going to be there for a while, simply because that’s all they can do to grow,” Joshi said.

The Reserve Bank has raised official interest rates at all its past 10 rate-setting meetings, but some in the financial markets believe it will pause at next week’s monthly meeting after weaker-than-expected inflation data.

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