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National Australia Bank (NAB) has so far been the only  one of the four major banks to  limit its adjustable home loan interest rate increase at 25 basis points bringing  the total rate to 6.49 per cent.

NAB's decision not to go higher than the Reserve Bank's official rate increase  means sacrificing $217 million in potential gross profit, according Craig Williams, Citigroup Global Markets leading bank analyst.

Commonwealth Bank of Australia (CBA), the country's biggest mortgage lender increased its  rates on its variable home loan rates by 37 basis points to 6.61 per cent starting December 9.  Although the bank  rates increase was 12 basis points over the RBA, it raised its deposit interest rates by a higher 50 basis points.

Meanwhile, ANZ  announced  its  35 basis points  increase on  its standard variable interest mortgage loan rate  to 6.66 per cent, from Monday December 7.

Westpac  implemented the highest rates increase at 45 basis point, almost twice the RBA's 25 basis point rate increase.  The banks standard variable  mortgage rate totals  6.76 per cent starting Dec 4.

The rate increases put WESTPAC and NAB at opposite ends in terms of home-loan rates.  According to NAB, a customer with a $300,000 loan will pay $51 less monthly compared to a Westpac customer who has loaned the same amount.

Both Westpac and CBA said that  wholesale funding costs which have increased to more than the RBA’s rate increase made them hike their variable rates higher than the RBA's.

The NAB, which holds the least home-loan exposure among the major banks has therefore  the least to lose with the lowest interest rate.  It's rates strategy is  a direct competition with Westpac customers.

Both banks have their own reasons for the rates increase they have set. For instance, Westpac's Kelly could be protecting the bank's profit margin from the $29 billion home loans it has released so far and its customer base has already increased significantly.

On the other hand, NAB's home loans total is only $6.6bn which comes almost  entirely from the increasing deposit growth.