The Reserve Bank is expected to deliver its biggest official cash rate (OCR) hike in history on Wednesday as it fights to get inflation under control.
It has homeowners bracing for interest rate rises, and mortgage brokers are seeing Kiwis ditch things like health insurance to try and cut costs.
Homeowner Matt Weldon Smith bought his Wainuiomata house in September last year when house prices were through the roof.
"I bought at probably its most expensive point, and now I've lost $100,000 on it, kind of thing, so it's depressing to watch it all go down," he told Newshub.
He fixed his mortgage at 2.89 percent for two years, but when it comes up in 10 months it could be at least double that.
"Very worried about how I'm going to afford anything at that point," he said. "I just don't how I'm going to cut back and where at this stage."
It's tough decisions like these that mortgage advisor Graham Goodisson said many homeowners are making.
"They're ringing us to cancel things like their life insurance and their health insurance. So the implications of that is quite severe and consequently is going to be catastrophic than a little bit of equity loss," said Goodisson, who is an advisor at Velocity Financial.
Goodisson's expecting more desperate calls like that now that the Reserve Bank is set to issue its final rate hike of the year.
"Everyone at the moment seems to be picking a 75 basis point increase," said Infometrics principal economist Brad Olsen. "That would be the largest increase that the Monetary Policy Committee has ever done in its 20-plus-year history."
Seventy-five basis points would take the OCR to 4.25 percent. Banks have already built much of that increase into their rates, but they are forecast to go even higher.
"Inflation is far too persistent, it's far too pervasive, and to get it under control interest rates must rise further," Olsen said.
Goodisson has some advice if that is making people feel stressed.
"Go and see an advisor, that's what they are there for."
