ANZ is the first lender to announce it's raising its variable rate by 0.25% in line with the RBA move. This takes ANZ's variable rate loan to 6.06% from 5.81%.

The bank also raised its fixed rates, with mortgages locked in for one or two years jumping 0.25% to 5.70% and 6.69% respectively. The three-year fixed rate has risen by 0.1% to 7.09%.

CBA, NAB and Westpac are still reviewing their rates, but are expected to act quickly now that ANZ has made the first move.

Looking ahead, CommSec is forecasting another rate hike on Melbourne Cup day and expects cash rates to hit around 4.5% over the next year. However, some experts believe the RBA will raise rates by less than the market is expecting according to Bloomberg.

"I don't think the RBA can hike as quickly and as much as the market expects," Guthrie Williamson told Bloomberg. "The Aussie dollar is going to absolutely soar. That will hurt our export sector and it's deflationary, so inflation is not a problem." Williamson is a portfolio manager in Sydney at fund management firm PGI.

CommSec noted in its report that the start of the last rate hike cycle in 2002, the Reserve Bank made two quick fire rate hikes before retiring to the sidelines. But at that time the low point for rates was 4.25% - much closer to the "normal" or neutral zone around 5%. "In the past the Reserve Bank has lifted rates a few times before resting to gauge the impact. Therefore, another rate hike on Melbourne Cup day is a safe bet," said Craig James, chief economist with CommSec.

Many industry analysts blasted the rate hike as "too aggressive, too soon", however, real estate agents believe this early rate hike may actually prompt investors and homebuyers to dive into the property market sooner than later.

"This initial rate rise may generate more activity from buyers looking to get in the market and perhaps fix part of their mortgage before rates rise again," said Ray White Joint Chairman Brian White.

Real estate agents also dismissed comments that the small rate hike will derail the nascent recovery in house prices across Australia.

"This 0.25% rate rise was expected. I think we can afford a couple of interest rate rises and the confidence in the economy and the real estate market will override any concerns about where rates are headed," said White.

Jim Midgley, PRDnationwide national director said that recent rate hike will not have a material impact on the property market as investors and homebuyers have already factored it in their finances.

"I think people look at the total cost to them and it's really quite minor. I don't think we're going to see a great slowing in the property market unless rates go up by say 1% or more but that may not happen for sometime."

Midgley added that there will be a number of people looking to lock in purchases before rates go even higher.

"Investors also think the market has already bottomed in terms of price and think now is a good time to look for good value property. I think investors are keen to get into the market and I don't think the interest rate hike will stop them doing that," he said.

The Reserve Bank of Australia lifted the official cash rates by 0.25% prompted by a slew of upbeat economic data released recently. If the lenders pass this latest rate hike in full, it will add an extra $48 a month on a $300,000 loan taken over 30 years.

The Commonwealth Bank estimate that more than 90% of its home loan customers are ahead in their loan repayments according to CommSec. That is, when interest rates were cut, most customers elected to maintain existing repayments. 

"The main burden of the rate hike will hit those that have purchased or built homes relatively recently. And the higher loan repayments will certainly be factored in by budding home buyers in coming months. The housing market shouldn't be adversely affected by the small rate hike because it is the level of interest rates that matters, not the change in rates. Cash rates are still historically super-low, translating to affordable repayments. But budding home buyers need to do their sums. Rates will continue to rise over the next 12-18 months, probably between 1.5-2 percentage points," said James.

It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan