The Reserve Bank of Australia does not believe the banks are over-charging mortgage borrowers.

RBA governor Glenn Stevens was asked before the House of Representatives Standing Committee on Economics on Friday about major Australian banks increasing their interest rates beyond the 0.25 per cent cash rate rise in November.

Commonwealth Bank lifted its rate by 45 basis points, ANZ by 39, NAB by 43 and Westpac by 35 points.

Mr Stevens said the RBA anticipated that the banks would move higher than the official cash rate and defended the banks' actions.

"In the end, the question is really whether all of those people with a mortgage are paying higher, seriously higher, rates than they should be, from an economic management point of view," he said.

"What I'm saying is I don't think they are. We've pretty much offset the change in the margins with doing different things in the cash rate than we would have done had the margins not shifted."

In defense of the banks, Mr Steven said "If my choice is between banks with good profits and banks with no profits, I choose the former every time from an overall macro-economic point of view."

"People look at the overall size of profits in billions but we need to be careful not to forget the size of capital that's invested in these institutions."