Soaring interest rates will see Kiwis fork out almost a billion dollars extra in mortgage payments this year.
GE Money home lending director John Grant said an average interest hike of two per cent will affect about $45 billion of home loans rolling off fixed rates - a total of about $900 million.
The revelation comes as housing affordability continues to fall.
The latest quarterly report by Massey University's Property Foundation shows a 6 per cent decline in the past year.
And financial pressure is being felt even by high earners, with one budget service giving food parcels to a family with a six-figure household income.
Grant predicted the increase in interest rates would cause more misery for cash-strapped Kiwis and warned unexpected changes in income could see some lose their homes.
"It's one heck of a lot of money being channelled out of the pocket," Grant said.
"It's not just those with 100 per cent loans. They could have borrowed 60 per cent and be facing exactly the same predicament."
Banking industry experts estimate there are about 600,000 mortgages in New Zealand.
Based on that figure, senior analysts say about $155b is owed, with the average mortgage about $250,000.
That's a massive jump from 10 years ago when there was $56b in mortgage debt with an average of about $100,000.
The change is hurting huge numbers of average Kiwis with mortgages, among them first-time owners Lee Potter and Lori Clearwater.
The west Auckland couple both work 50 hours a week, with a combined annual income of $120,000, but are crippled by weekly mortgage payments of over $900 for a $375,000 house. Starting a family is out of the question, while holidays, Sky TV and a social life are also off the agenda, as the couple budget down to the last dollar.
They are weighing up a move to Australia where, even if they lost money on the sale of their home, Potter estimates they could double their income and quickly end up better off. Sick of forking out "dead money" in rent, the couple approached banks for a 100 per cent $375,000 loan when the Sunnyvale house next door to Lori's mum came up for private sale.
"They welcomed us with open arms. We were quite surprised when they said we qualified," says Potter, an engineer.
"We would have needed a $32,000 deposit and it was just too hard to try to save that amount."
Before becoming homeowners, the couple had money to spare, but the mortgage has put a stop to that - and their social life.
"We always had that bit of extra cash. Now, we only buy what we need.
"Then again, it's not dead money any more, I'm not paying someone else's mortgage."
Potter says he's sickened to think about how much he and Clearwater, an electrician, have paid in rent.
Now they also have to cope with a $1400 rates bill, which had risen more than $100 in the eight months the couple have owned the house.
They're on a fixed 9 per cent mortgage for 24 months and are hoping interest rates fall by the time it ends in the middle of next year - if they haven't already decided to cut their losses and cross the ditch.#"We are in a better position than most because we pay a slightly higher interest rate anyway," says Potter.
"I know some people who are really freaking out at the moment."
Grant told the Herald on Sunday it was becoming harder to secure a 100 per cent loan.
GE Finance had again tightened its lending criteria in the past few weeks to offset the economic downturn and more homeowners were struggling to meet repayments.
"We are getting three times the volume of those types of enquiries."
Many families facing mortgage misery are seeking free financial advice.
Darryl Evans from Mangere Budget and Family Support Services said 15 per cent of the organisation's clients had mortgages - treble the figure three years ago.
Families on middle and higher incomes were increasingly needing help and some asked for free food parcels.
One client had a combined income of $140,000 but were grappling so hard with a huge mortgage, holiday home, leased car and two sets of private school fees that feeding the family had become an issue.
Mandy Paget, A mortgage broker for New Zealand Mortgage Assignments, said those hurting most were first-home buyers who had borrowed 90, 95 or 100 per cent.
With property prices slumping, the capital value increases families were relying on for security were neglible. "There is hardly any equity there. They are in no position to sell, and even if they do, they won't make the money back."
The reality was, once you included lenders fees and insurance, 100 per cent loans often ended up being 101 or 102 per cent.
She said rises in living costs were adding to financial hardship but assured sacrifices made now would pay off sooner rather than later.
"If they can get by for the next year or two, then they should be okay. They will need to restructure their life and really budget, but houses will come back in value. In five years time houses will be much more expensive than they are now."
There was also a glimmer of hope from Hayden Atkins, New Zealand economist for Macquarie Capital Securities. He believes interest rates may drift slightly higher but are "close to their peaks" and should ease at the end of this year.
But there is little comfort for people saving to join the property ladder.