Top Australian lender Westpac Banking Corp said on Tuesday that it will raise its home loan variable interest rates by 25 basis points (bps), in line with the Reserve Bank of Australia's (RBA) rate hike.

In a surprise move, the RBA raised interest rates by a quarter-point to an 11-year high, and warned that further tightening may be required to ensure that inflation returns to target.

The cash rate now sits at 4.1%, bringing the total RBA hikes in its price battle to a whopping 400 basis points since May last year.

Westpac's new home loan rate will be effective from June 20, the bank said in a statement.

Westpac is the first of the 'big four' banks to have passed on the central bank's latest rate hike to its customers, with the other three expected to follow suit soon.

(Reporting by Echha Jain in Bengaluru; Editing by Savio D'Souza and Eileen Soreng)