The Greater Building Society has followed other major Australian lenders in increasing its home loan interest rates following last week's increase in the cash rate by the Reserve Bank of Australia.

Chief executive John Arnold said that the Greater's standard variable home loan interest rate would rise 0.35 percent to 8.95 percent.

Mr Arnold said like other financial institutions the Greater had to increase its rates above the rise announced by the Reserve Bank to partly offset additional increases in the cost of obtaining funds for customers.

Greater customers benefited from a 0.25 percent reduction in rates that the Greater gave to new and existing home loan customers in April last year. That cut in interest rates was a benefit to members, independent of any official move in interest rates.