The head of a major mortgage broking network has warned Australian borrowers of likely interest rate rises by lenders that are out of cycle with any decision by the Reserve Bank of Australia (RBA).

John Kolenda, managing director of 1300HomeLoan said that despite the fact that the performance of the Australian dollar could see the RBA cut the official cash interest rate below its current mark of 2%, mortgage rates may rise as lenders respond to stricter funding requirements.

“Mortgage holders can expect to be hit again by lenders because of their additional current funding, compliance and provisioning costs,” Kolenda said.

“With continued global economic uncertainty banks have recently seen their cost of funding increase and unless that eases they will have no choice but to pass those increases onto consumers,” he said.

Kolenda said any rate increases are likely to be similar to those announced last year by lenders as they increasingly make the RBA’s monthly cash rate decision something that is unnecessary for borrowers to take notice of.

“We saw variable rates last year increased by up to 0.29% and investor loans by up to 0.49%. There is likely to be similar increases across the board for owner occupier and investor loans in the months ahead,” he said.

“While the RBA has plenty of room to cut its cash rate again, its actions are expected to be made redundant by the banks lifting their rates out of cycle.”

Kolenda said banks are also under pressure to comply with a regulatory increase on reserves by the end of June this year, with watchdogs in Australia looking to shore up our banking system.

“More may follow around this issue as banks start to see the additional financial costs flow through,” he said.This is the first time in history we have seen multiple triggers at play outside the RBA's control that is forcing rate movements and competing with their directions.

“The Australian Prudential Regulation Authority wants to make our banks the safest in the world by enforcing new regularity requirements that will increase the cost of providing mortgages.”