Other banks are not seen to adjust their mortgage rates anytime soon.

After several months of speculation, one of the banking giants suddenly made a move to increase its mortgage rates by 14 basis points. The question remains: Will other banks follow suit?

In a Business Insider Australia report, UBS analysts Jonathon Mott and Rachel Bentvelzen said Westpac's mortgage rate hike would not be likely to move the needle for other banks immediately.

This runs counter to the wisdom that banks generally impose rate hikes after each other during an out-of-cycle repricing.

Also Read: Westpac is the first Big Four bank to raise rates

“We would not be surprised to see the other banks hold off for a few weeks/months, as they are not facing the same net-interest-margin (NIM) pressure as Westpac," the two analysts said.

Mott and Bentvelzen explained that the Westpac hike was a result of the margin pressures the bank encountered in its pursuit of an aggressive growth strategy.

The two said Westpac's NIM fell by 11 basis points to 2.06% over the second quarter of the year. Westpac's NIM decline was significantly worse than NAB and UBS, which both reported minimal adjustments.

According to the two analysts, other banks will have to be cautious around out-of-cycle hikes, especially as the ongoing investigations by the banking Royal Commission.

“If the major banks all reprice their mortgage books, one response from the Government may be to increase the Bank Levy," they said, adding that this had happened before in the United Kingdom.