Don't expect interest rates to stay still despite the Reserve Bank's decision to keep the official cash rate on hold - that's the warning from one rate watcher.

The central bank maintained the cash rate at 1.75 per cent today and so far there has been no change in either home loan or deposit rates from the major banks.

But Canstar, which monitors rates closely, has warned that home loan rates will continue to rise this year.

"Canstar expects home loans rates to continue to rise in 2017 as banks and other lenders aim to pass on the pressures of overseas funding costs, while looking to retain margin," Jose George, Canstar New Zealand general manager said in a statement in the wake the Reserve Bank decision.


There has already been a flurry of mortgage rate increases since the start of the year with a number of banks increasing longer term fixed rates more than once.

Some have also increased their floating rate - an unusual move in what has been a falling cash rate environment.

George urged home-owners to prepare for higher rates.

"For existing home loan customers Canstar recommends that they review their budgets and stress test their repayment capability through online calculators to ensure that they can accommodate any potential increased cost of servicing their loans."

He said first home buyers and investors should be wary of the increased rates and their impact on affordability.

"While the early signs of a slowdown in the market is encouraging, this could be offset by an increased burden of repayments in a costlier home loan environment."

Canstar's warning comes a day after finance minister Steven Joyce cautioned potential property buyers from getting too comfortable with New Zealand's historically low interest rates, saying they should consider whether any mortgage debt taken on is still affordable in three or four years if rates rise.

Speaking to the parliament's finance and expenditure committee yesterday, Joyce said New Zealand's housing supply shortage was shrinking given the country's "biggest ever building boom" and there were signs Auckland's property market was cooling. All of that suggested "there's not much upside in house prices".

"The bigger risk that people should just think about is the potential for interest rates to now rise in the years ahead - we're seeing that now in bond rates and that's why I think it's important people don't overextend themselves at this point," Joyce said. "It's often in the case of economics that once people have something for a while, whether it's low oil prices, high oil prices, or low interest rates, they seem to assume it will last forever, but it doesn't."