Lending costs have been rising for the past five months, analysis shows.

The three-month bank bill swap rate, a key cost of funding, has risen by about 22 basis points, which means higher interest costs for lenders' wholesale and retail funding portfolios.

Australian Prudential Regulation Authority is also flagging it will require lenders to hold additional capital for investment and interest-only loans. Big banks with bigger deposit holdings are less reliant on overseas' funding and have greater pricing flexibility for investor and home lending.

Suncorp has increased rates on owner-occupier, interest-only and principal and interest loans by between 5 and 12 basis points.

Interest rates are rising in response to wholesale funding and regulatory costs, despite no change from the RBA. Paul Rovere

Rates on hold

Residential lines of credit, which is a prearranged credit limit, are up by 25 basis points.

MyState, the Tasmanian-based lender that relies heavily on mortgage brokers for mainland distribution, is increasing rates on some investment and residential home loans for both interest-only and principal and interest-only by 10 basis points.


Other lenders, such as ME Bank, which is owned by 29 industry funds, are also warning about margins coming under pressure in the second half as credit growth slows.

Bankwest, which is owned by Commonwealth Bank of Australia, the nation's largest lender, is increasing the maximum loan to value for interest-only investment loans from 80 per cent to 90 per cent.

Analysts expect the RBA board to hold the cash rate, which is the market interest rate on overnight funds, at 1.5 per cent when it meets on Tuesday.

If so, it would mean the rate has remained unchanged since a 25 basis point rate cut in August 2016.

More than nine out of 10 financial experts polled by finder.com.au expect the nation's central bank to keep rates on hold.

"High business confidence, strong jobs growth and the RBA's own growth and inflation forecasts argue against a rate cut, but risks around consumer spending, weak wages, growth and inflation, the slowing Sydney and Melbourne property markets and the still high Australian dollar argue against a rate hike," according to Shane Oliver, chief economist for AMP Capital.

The experts also warned that high numbers of fraudulent loan applications identified by UBS Wealth Management could mean it would take only two 25 basis point rises before mortgagors started defaulting.