An Australian bank today became the first lender to pass the rising cost of funding on to the consumer, by raising its mortgage rates by 0.25% for existing customers without a rise in the central bank rate.

Adelaide Bank, which has just merged with Bendigo Bank to create Australia's seventh largest bank with a loan portfolio of more than A$43bn (€25bn), raised certain mortgage rates by 25 basis points in response to its own higher cost of funding in the international credit markets, according to Will Rayner, head of investor relations at the bank.