Westpac will raise its home loan interest rates for investors and owner-occupiers, following a similar move by National Australia Bank.

Westpac has raised its standard variable mortgage rate for owner-occupiers by 0.03 percentage points to 5.32 per cent for those who are making principal and interest repayments, while investor loans in that category will increase by 0.23 percentage points to 5.79 per cent.

However, there is an extra cost for those customers with interest-only loans, who are not repaying any principal.

Owner-occupiers in this group will see a 0.08-percentage-point increase to 5.49 per cent, while property investors with interest-only loans will see a 28-basis-point rise to 5.96 per cent.

The move comes after NAB yesterday increased rates for owner-occupiers with a much bigger increase in investor interest rates.

As with NAB, Westpac's head of consumer banking George Frazis said the decision reflected higher costs for the bank.

"Today’s changes are in response to increasing funding costs," he said in a statement.

"Despite home loan interest rates being at historically low levels, both deposits and wholesale funding of mortgages have increased over the last nine months."

Small businesses will also face a 0.08 percentage point rise in their variable lending rates.