The recent spike in US bond yields is starting to ripple through the Australian mortgage market, with a string of wholesale-funded lenders moving this month to increase fixed rate home loans. In a sign that local lenders are expecting the cost of wholesale funding to rise consistently in coming years, rates on mortgage products fixed up to five years are being repriced by as much as 0.45 per cent.Homeloans Ltd is the latest lender to reprice after it boosted fixed rates for Optima-branded mortgages on Monday.The pricing on a five-year fixed rate Optima mortgage for owner-occupiers paying principal and interest has risen 45 basis points to 4.59 per cent, while the equivalent product for investment borrowers has gone up 30 basis points to 4.69 per cent.These rates apply to borrowers with loan to value ratios of between 70 per cent and 80 per cent.Homeloans head of treasury, Andrew Marsden, said the increases were attributable to rising bond yields."We manage our fixed rate pricing through the swap rate market," he said."What we are seeing in the market is the effect of the steepening of the yield curve."It's the broader market's expectation that the cash rate will increase later in the year."Market intelligence collated by Canstar indicates that pressure is mounting on other lenders to reprice fixed rate offerings to accommodate the expected long-term impact of bond yield rises.Non-bank lenders with no recourse to cheap deposit funding are under most pressure to reprice because their cost of funds are intimately tied to movements in offshore bond markets."The rises in fixed rates are not surprising when you consider the recent movements in US bond markets are eventually going to flow through to lenders who rely on wholesale funding," said Canstar's head of financial services, Steve Mickenbecker."There is no doubt that the turning of the yield curve is already kicking in and it seems inevitable that most lenders will be increasing fixed rates over the next two years.""That's because most lenders have some element of wholesale funding".However, Mickenbecker says a short-term effect of rising wholesale costs might be to erode the pricing advantage that mortgage lenders not supervised by APRA currently hold over heavily regulated deposit taking institutions."The differential between the pricing of non-bank lenders and supervised banks is probably going to narrow," he said."Right now, approved deposit takers have a funding advantage because there has been no increase in the interest rates they pay deposit customers."Other lenders that have hiked fixed rates this month include Aussie, ING and Macquarie Bank.Aussie has boosted its three-year fixed rate for borrowers paying principal and interest by 31 basis points to 4.19 per cent, while the same product fixed over five years has risen 20 basis points to 4.39 per cent.ING has increased the five-year fixed rate on investment loans by 41 basis points to 4.9 per cent.Macquarie has added 31 bps to its basic three-year fixed rate mortgage targeted at owner-occupiers paying principal and interest. The advertised rate on this product is now 4.19 per cent.