National Australia Bank is the first of the big four banks to raise its owner-occupier interest rate, lifting its standard variable rate by 7 basis points to 5.32 per cent.

Australia's fourth-largest home lender lifted its residential investor home loan rate by 25 basis points to 5.8 per cent.

Antony Cahill, NAB's Chief Operating Officer, said the increases were needed to "strike the right balance for all our stakeholders."

“The difference between what we charge and how much it costs us to fund a mortgage remains under pressure, with intense competition, increasing regulation, and elevated funding costs," he said.

The move was announced in the wake of the US Federal Reserve's decision to lift the cash rate for the second time in three months, and indications that US rates are likely keep heading higher.

Higher rates in the US could mean borrowing costs for Australian banks will rise, potentially putting pressure on margins.

At the same time, NAB is offering first time owner-occupiers an interest rate of 3.69% per annum fixed for two years, the lowest home-loan rate ever offered by the bank.

Cahill said the increased rate for investor loans is aimed at managing growth in that sector.

“We’re committed to managing our investor lending growth in line with the regulator’s guidance,” he said.

The latest data from the ABS shows that the value of property loans to investors is at a 20-month high. Investor loans are up 27.5 per cent on a year ago, the fastest growth rate in 29 months.

See also:

Other lenders fill the gap as big four clamp down on foreign borrowers

CBA tightens reins further on home lending

BankWest to remove negative gearing benefits for mortgages