If the Commonwealth Bank and Westpac had been located anywhere else, they wouldn't have pushed up rates.
The Australian Prudential Regulation Authority has imposed tough new capital requirements requiring the big banks to back housing loans with more cash. 
In the United States and elsewhere where this has happened the banks' shareholders simply accepted lower returns. More capital made the banks safer, less deserving of an outsized return to compensate for risk.
Not here. Westpac and the Commonwealth seem to believe their shareholders are entitled to outsized returns no matter what.
Westpac's return on shareholder funds is an astonishing 15.8 per cent. The Commonwealth's is even higher - 18.2 per cent.
In the United States, Morgan Stanley, run by Australian James Gorman, accepts high single-digit returns. In Australia recently, he said investors were becoming more comfortable with idea of banks holding more capital in exchange for lower earnings.
As recently as two months ago the head of the Commonwealth Bank, Ian Narev, said the same thing. "As you carry a bit more capital and wear a bit more costs, you are going to get a moderate decline in profitability," he told shareholders while announcing a $5 billion capital raising.
Not now. Westpac and the Commonwealth (and quite possibly soon the other big two) appear determined to maintain their profits. And perhaps to increase them.
Westpac is lifting its variable mortgage rates by 0.20 points, the Commonwealth by 0.15 points. The only thing that will make them think twice is losing business. The Commonwealth and Westpac think we're too lazy to move across.