Yesterday the major lifted its standard variable mortgage rate and business lending rates by 0.39 per cent - well above the RBA's 25 basis point cash rate hike, but just shy of CBA's 0.45 per cent rate increase.
The bank's variable interest rate has now risen to 7.8 per cent.
Speaking about ANZ's rate hike decision, the bank's chief executive officer Phil Chronican said the major had now recovered its higher funding costs and more rises were unlikely.
"The intense competition for deposits and high wholesale funding costs is very real and has continued to increase the average cost of lending. ANZ's fortunate however that these pressures are less pronounced because of our funding diversity, particularly our ability to grow deposits in Asia," he said.
But while ANZ's out of cycle rate hike has ultimately added to the political heat surrounding all the majors, the bank was able to soften the blow somewhat by announcing its plans to scrap mortgage exit fees.
Mr Chronican said the bank's decision to scrap its $700 exit fee would give Australians greater choice by reducing switching costs.
"Our mortgage exit fee was already among the lowest in the market and by abolishing it we are telling our customers we are prepared to win and retain their business through competitive pricing, convenient products and great customer service," he said.
With ANZ now making the decision to move on rates, the industry now waits with baited breath to see what both NAB and Westpac will do.
There are plenty of indications to suggest NAB will be the next to move.
Yesterday, the bank's chairman Michael Chaney said while the major's rates are still "under review", a decision would be made shortly.
"Certainly there will have to be a flow-on, obviously, of those interest rates, and it is a pretty complex issue, that's about all I can say," Mr Chaney said at a CEDA conference in Perth.