Economists say there might be only only one or two more interest rate rises before the Reserve Bank takes a break from its hiking cycle.
The Reserve yesterday raised the cash rate by a quarter of a per cent to 4.25 per cent, the second rate increase this year and the seventh since October.
The Commonwealth, Westpac, National Australia and ANZ banks have already lifted their standard variable mortgage rates and those on other bank loan products by 25 basis points.
Business groups said yesterday the RBA's decision to raise interest rates will hinder economic recovery.
With retail sales and building activity still weak, peak bodies for those sectors are worried that home loan borrowers will cut back on consumer spending.
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Interest rates have now risen five times since October, with the latest increase of a quarter of a percentage point taking the cash rate to 4.25 per cent.
The decision will add $48 a month to repayments on an average $300,000 home loan.
The latest move comes less than a week after official data was released showing retail sales dipped in February as government stimulus measures were wound back.
The Australian Retailers Association said consumers could not cope with another rate increase, on top of the March move.
"They need time to properly manage increases to their mortgages without pulling back so much on their spending that retailers and retail workers suffer," the association's deputy executive director Jennifer Cromarty said.
The RBA's "impatient" approach to rate rises would stall a retail sector-led recovery in the economy, she added.
Australia's peak building and construction industry association, Master Builders Australia, said the latest rate increase would deter home borrowers and investors from spending.
"Higher interest rates will dent home buyer confidence and could pull the rug out from the private housing market as investors and homebuyers stay on the sidelines," chief executive Wilhelm Harnisch said.
The Australian Chamber of Commerce and Industry, which represents 350,000 businesses, said the rate rise would add to business costs.
"Today's interest rate increase should diminish the need for further rate increases in the near future," the chamber's chief executive Peter Anderson said. "If not, the combined effect of multiple rate rises will slow the economic recovery, especially in the small business sector."
The Australian Industry Group pointed out that a recovery in the manufacturing sector was still fragile.
Small business borrowing rates are three quarters of a percentage point above the long-term average, chief executive Heather Ridout said. Only the Mortgage and Finance Association of Australia - which has 12,000 mainly home loan broking members - had anything positive to say.
"Changes to the official interest rate can present significant opportunities for consumers who have not already looked into refinancing options," chief executive Phil Naylor said.
Smaller banks and credit unions - which lost market share to the major banks during the global financial crisis - were making a strong comeback, Mr Naylor said.
The rebound has more to do with the federal government buying residential mortgage-backed securities than any RBA action, however.
