National Australia Bank (ASX: NAB) is the latest among the country's major banks to lift rates above central bank levels. NAB today confirmed it is raising its standard variable mortgage rate by 43 basis points.

Last week the Reserve Bank of Australia raised cash rates by 25 basis points with Commonwealth Bank of Australia (ASX: CBA) and Australia and New Zealand Banking Group (ASX: ANZ) following with higher hikes irking the government. Westpac Banking Corp (ASX: WBC) the only other top bank yet to move, has said it is still reviewing rates.

But even with today's hike, NAB said it is maintaining a highly competitive rate of 7.67 per cent pa compared to CBA's rate of 7.81 per cent and ANZ's rate of 7.80 per cent.

Lisa Gray, Group Executive NAB Personal Banking, said: "For 17 months NAB has delivered its customers the lowest standard variable home loan interest rate of the major banks and today's announcement means we will continue to offer a highly competitive rate.

"NAB is committed to continuing to offer fairer value banking to our customers. Offering a highly competitive standard variable home loan rate as well as some of the best deals on bank fees is an important part of this.

In an effort to limit a political backlash, NAB said it is scrapping loan-exit fees. This move however is expected to fail in mollifying customers as ANZ earlier this week also abolished exit fees, which can go as high as $900 dollars, but failed to appease clients.

NAB will likewise lift a range of deposit interest rates by between 0.25 per cent and up to 1.00 per cent. Business lending variable rates will increase by 0.43 per cent pa.

The changes to interest rates announced today will be effective from Monday 15 November 2010. The abolition of Early Exit fees on NAB home loans will be effective Monday, 6 December 2010.

With Reuters