* Raises variable rates to 5.60 pct, effective Nov. 12
* NAB follows CBA, Westpac which raised earlier this month
* Fuels speculation RBA may be forced to ease official rates
* Move to boost annual earnings by 2-3 pct - analyst
* NAB shares up 2.4 pct on Friday (Recasts with ANZ rate increase, CEO comment, updates shares)
By Swati Pandey
SYDNEY, Oct 23 (Reuters) - National Australia Bank NAB.AX and Australia and New Zealand Banking Group ANZ.AX on Friday became the last of the four major lenders to increase variable mortgage rates, aiming to cover the costs of tougher capital rules.
The rate hikes could help boost annual earnings at Australia's biggest lenders by 2 percent to 3 percent, analysts said, despite the banks' claims that they are merely passing on high costs.
"This is positive for the sector's profitability and return on equity," Deutsche Bank (DE:DBKGn) said in a research note to clients.
"We estimate the current round of repricing should boost earnings by approximately 2-3 percent across the majors on a full-year basis."
NAB said it would raise variable home loan rates by 17 basis points, after similar rises by top mortgage lenders Commonwealth Bank of Australia CBA.AX and Westpac Banking Corp WBC.AX . All new and existing variable rates would rise to 5.60 percent, NAB said.
ANZ said it would increase its variable rate for owner-occupier home loans by 18 basis points, effective Nov. 20, adding A$36 per month to the average home loan of A$242,000.
"This decision reflects the significant additional cost of capital banks are now required to hold against home lending," ANZ CEO Australia Mark Whelan said in a statement.
Regulators have ordered Australia's banks to hold more capital against their mortgage books, forcing the biggest lenders to raise over A$20 billion ($14.42 billion) since May. It had been expected to hold rates at record lows of 2.0 percent.
Bank shares rallied on Friday but NAB jumped the most, up 2.3 percent while the broader market rose 1.8 percent. ANZ climbed 1.1 percent.
Australian banks' return on equity at 16.5 percent is among the best in the developed world, thanks mainly to their massive mortgage books. That compares with 9.6 percent for U.S. banks and 2.4 percent for U.K. lenders.
Higher mortgage rates threaten to put the brakes on the housing sector and dampen consumer sentiment, increasing pressure on the central bank to ease monetary policy at its next meeting on Nov. 3. ($1 = 1.3873 Australian dollars)