St. George Bank increased variable mortgage rates by 0.25 percent to 9.02 percent, the Sydney Morning Herald reported. But, some banks have elected to pass on the new rates, the report said.

The government is expect announce reforms of banks after a Friday meeting with speculation that banks will be force to make it easier for customers to switch accounts to another bank.

"At the moment, when consumers switch accounts, they are required to get in touch with every direct debtor and creditor and inform them," said Elissa Freeman, a policy officer with Choice, a consumer advocacy group.

Australia's Treasurer Wayne Swam has been advocating for consumers to change banks if they are unhappy with the rates at their current bank.