ANZ’s boss says raising their variable home loan rate was “inevitable” as the cost of funding their bank increased.

ANZ lifted their rate by 0.16 per cent on Thursday afternoon, just a week after Westpac made a similar call.

Three of the big four banks have now increased their home loan interest rates, with NAB being the exception.

Mr Elliott tells Ross Greenwood ANZ’s decision to increase the price of mortgages was “inevitable”.

“We’ve got a business to run and we’ve got to take in a lot of factors when we make these decisions.

“We want to have the best product out there in the market for our customers.

“On the other hand, I’ve got to look at my cost and the reality is that the cost of funding the bank has gone up pretty substantially over the last six months.”

When asked whether shareholders are being put before customers, Mr Elliott says they have to “balance” both sides.

“It’s not about who comes first, who’s second,” he says.

“It’s about getting that balance right.”

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When it comes to the banking royal commission, Mr Elliott says Australians deserved the opportunity to personally reveal how the banking system had failed them.

“I understand the need for individuals to feel they’ve had their day in court… they’ve said their story if they’ve been harmed or felt that they’ve been put into difficulty by the banks.

“I can understand that.

“At the end of the day, this is the right thing to go.”