Photo: © 2006 AAP/BILL BACHMAN

It's the third consecutive rise, and the sixth in eight months, and takes rates to their highest level since December 2008.

Three of the four big banks wasted no time in passing the rise on to customers.

It leaves those with a $300,000 around $50 a month out of pocket.

Though bad news for those with a mortgage, the Reserve Bank says the rise is a sign of the current economic good times.

"With the risk of serious economic contraction in Australia having passed some time ago … [we are bringing rates back towards average levels] over the past decade or more," it said in a statement.

The rate rise comes on the back of a warning that the Australian housing bubble is about to burst, with houses sitting at more than 50 per cent above their fair value.