ANZ has announced it is lifting its standard variable mortgage rate by 39 basis points, but it is also abolishing its mortgage exit fee.

The bank's 39-basis-point move is above the Reserve Bank's official increase of 25 points last week but below the Commonwealth Bank's 45-basis-point increase.

ANZ's standard variable rate will rise to 7.80 per cent per annum from Monday, just below the Commonwealth rate of 7.81 per cent.

However, ANZ has also offered some sweeteners in an attempt to mollify customers, politicians and regulators.

It says it will abolish its deferred establishment fee, more commonly termed an exit fee, as well as dropping fees for customers switching to a special three-year fixed loan it is offering.

ANZ is cutting its three-year fixed home loan rate by 44 basis points to 7.1 per cent per annum until the end of the year.

Spokesman Paul Edwards says the bank will not try to recover its costs in other areas and that they will be absorbed by the bottom line.

"In the broader context this is the right thing to do," he told ABC News 24.

"But there's no doubt this will cost us tens of millions of dollars."

ANZ says there will not be any more increases in the bank's interest rates for now.

ANZ's head of Australian operations, Philip Chronican, has told PM the bank has been forced to recover some of its funding costs.

"Obviously we will continue to keep a close watch on funding costs. Certainly I hope there isn't any further move because I do appreciate that this is very stressful on many of our customers," he said.

ANZ's move to abolish its exit fees comes just ahead of an expected announcement by the Australian Securities and Investments Commission about what action it might take against such charges.

ANZ is also raising business loan rates by 39 basis points, while credit cards rates will rise 25 basis points.

Finance Minister Penny Wong says she expects public backlash in response to ANZ's decision to increase its mortgage rate.

She says there is no justification for the move.

"We are likely to see the same sort of public hostility to this decision today as we have seen to the decision of the Commonwealth Bank," she said.

"It is another case of the big banks showing disregard for their customers and putting profits before their customers and before the community's standards."

Opposition treasury spokesman Joe Hockey has renewed his call for a full review of Australia's banking sector.

"For the 34 warnings Wayne Swan has issued to the banks not to go beyond the Reserve Bank, today the ANZ kicked sand in his eyes and in the eyes of the Gillard Government," he said.