The ASB has raised its fixed mortgage rates across the board and some analysts are picking other banks to follow.
The ASB's six month rate has risen by 25 basis points to 5.75 and its one year rate by 20 points to 6%.
It follows better than expected inflation figures out on Thursday, rising interest in the housing market and other signs of an economic recovery.
The Reserve Bank will be keeping a close watch on the situation.
It will be reviewing the official cash rate at the end of the month - but economists are still picking it will leave interest rates unchanged until next year.
ONE News' Corin Dann says the Reserve Bank Governor Alan Bollard is now facing some serious heat over his pledge to keep bench market interest rates at or around 2.5% and he may now change his stance.
