Westpac yesterday ventured into politically treacherous terrain after announcing the first out-of-cycle mortgage rate increases by a major bank this year.While smaller lenders such as Bendigo, AMP Bank and ING boosted lending rates more than a month ago in response to rising short and medium term money market rates, the majors have sat tight as their reputations were battered at hearings of the Hayne royal commission.Westpac will hike rates on all owner-occupier and investment mortgages by 14 basis points from 19 September.The bank's standard variable rate will rise to 5.38 per cent for owner-occupiers with principal and interest payments.When implemented Westpac's advertised rate for standard variable mortgages will be up to 18 bps more expensive than headline rates offered by its major rivals that are yet to signal any repricing moves of their own.Westpac's repricing stoked the share prices of all major banks on Wednesday as investors gambled that it would clear the way for each of the big lenders to shore up their net interest margins.Westpac scrip posted the biggest gains of the day, closing up 2.74 per cent to A$28.88.  CBA and ANZ also closed up by more than 2 per cent.However, the stockmarket might have jumped the gun by assuming that the other majors will automatically follow the Westpac repricings.Canstar group executive Steve Mickenbecker said Westpac's main competitors would try to assess the public reaction to the rate hike before deciding whether to take similar action."I wouldn't be surprised if the others left it for at least a couple of days to see whether borrowers are prepared to stomach mortgage rises in light of the negative fallout coming out of the royal commission," he said."The cost of offshore funding has risen this year and at some point the other major banks will probably need to move."But we all know they haven't moved earlier because they are worried about public's perceptions at the moment."Mickenbecker said he was surprised by the size of the Westpac increases given that regional banks such as Bendigo and Bank of Queensland had raised owner-occupier rates by nine and 10 basis points respectively."The Westpac increases sort of open the floodgates a bit because they are higher than the moves announced by the regional banks," he said.The major banks could face a tough time justifying home loan rate rises on grounds that they have already recouped the cost of higher offshore funding costs by slashing deposit rates.This argument could be levelled effectively at CBA, which is less exposed to movements in wholesale funding markets because of its very large retail deposit base.CBA crunched returns to depositors in early July, including a 30 basis point cut to the ongoing rate on online savings accounts to 0.5 per cent.Westpac also savaged online depositors last month by lowering internet saving rates by the same amount.The head of Westpac's consumer bank George Frazis yesterday avoided any references to the aggressive deposit account repricings, electing instead to focus selectively on movements in domestic bank bill swap rates to justify the