First-home buyers are taking on more debt than ever before and are borrowing more than five-times their income as house prices continue to surge.
Economists say this piles pressure on the Government to make even more moves against investors.
The new data released by the Reserve Bank shows half of first-home buyers' mortgages were five-times or more than their income in December. That's up from about one-third of first-home buyers the year before.
Brad Olsen, Infometrics senior economist, says it highlights how unaffordable housing is.
"[It also shows] how much people are jumping into the market, trying to secure a property, and getting up to their eyeballs in debt."
Finance Minister Grant Robertson told Newshub he is "concerned about borrowing of this nature".
He has asked the Reserve Bank to look into introducing a debt to income cap that would limit the amount buyers can borrow. But the Government is only keen on the idea if it would hurt investors more than first-home buyers.
Robertson said he's particularly interested in whether a cap could be "implemented for investors... in a way that does not disproportionately impact first-home buyers and low-income borrowers".
Olsen warns when interest rates rise, monster mortgage holders will be caught out.
"We are going to see first-home buyers getting in a much more compromised position. Some will be stressed to the limit and possibly not able to afford those repayments on those incredibly high values of loans that they've got," he says.
Not only are the sizeable loans concerning, but the latest figures from CoreLogic show house values also rose 2.2 percent last month - an annual growth rate of 16 percent.
This was the strongest annual rate of growth for almost 15 years, CoreLogic head of research Nick Goodall says.
It's not getting any easier for first home buyers to get on the market. If this keeps up, loans will only get bigger with Government policies doing little to put off investors.
