Commonwealth Bank of Australia Ltd (CBA) has matched the central bank, increasing its standard variable mortgage interest rate by 25 basis points.

The bank’s standard variable rate will rise to 6.24 per cent as of Monday November 9, from 5.99 per cent, Sydney-based CBA said in a statement on Tuesday.

The Reserve Bank of Australia (RBA) increased the overnight cash rate by 25 basis points to 3.50 per cent on Tuesday - the second increase in the space of a month.

CBA group head of retail banking services Ross McEwan said the bank’s wholesale funding costs remain high.

“Funding pressures and market interest rates continue to be significant issues for financial institutions and today’s increase reflects the costs being experienced,” he said.

“The majority of Commonwealth Bank variable rate home loan borrowers are already paying off more than the required amount, as we continue to offer the lowest variable home loan rate among the major banks.”

CBA also increased the interest rates on its the NetBank Saver and Business Online Saver deposit accounts by 25 basis points.

CBA is Australia’s largest home lender.

AAP