Regional banks and mortgage managers are being forced to put up mortgage interest rates while their big bank rivals sit pat, but they are not conceding defeat just yet.At least one mortgage manager is already at work on a product overhaul. Resi Mortgage Corp withdrew its Great Rate basic home loan from the market six weeks ago and started work on a product review. Resi increased the rate on its flagship variable rate loan by 15 basis points to 7.84 per cent on October 1.Resi's head of customer advocacy Lisa Montgomery said the group had come up with some new products that fitted the "buying range" and would be launching them in the next few weeks.Montgomery said: "It is a new marketplace. The banks do have greater flexibility and they can hold out longer than we can. But their rates will go up."Things could be quite erratic for a while. Different funders are passing on different cost increases."Resi is funded by Challenger and to a lesser extent Puma. Montgomery said: "We are in a position now where we have to go back to the drawing board and sort out our pricing, but we have always been innovators."InfoChoice managing director Dennis Orrock said: "We are going to see product revisions. Lenders will be talking to their funders to see what they can deliver at different price points. It is about what features they can have at a given rate."The big banks are all quoting a standard variable rate of 8.32 per cent. Allowing for the 60 basis point discount the Reserve Bank says is the average, the "buying range" is around 7.72 per cent.Macquarie and Aussie have put up standard variable rates by 10 basis points (Macquarie's increase was for new business only). Both lenders tier their rates. On October 1 the rate on Aussie's Premium Plus loans between $200,000 and $350,000 went up to 7.8 per cent; the rate on Premium Plus loans between $350,000 and $500,000 went to 7.67 per cent and the rate on Premium Plus loans above $500,000 went to 7.6 per cent.Macquarie's standard variable rate for loans up to $250,000 went to 7.8 per cent early in September and the rate for loans above $250,000 went to 7.64 per cent.Rams, Adelaide Bank and Resi have put up variable rates by 15 basis points. Adelaide's standard variable rate is 7.82 per cent and Resi's Complete Home Loan rate is 7.84 per cent. The Rams Smartway Pro Pack is 7.87 per cent.There are many other small non-bank lenders that have made similar moves. If the big banks continue to discount and hold rates steady those non-bank rates could be uncompetitive.