First home buyers could be at the greatest risk, should interest rates rise

CoreLogic research shows more first home buyers are snapping up properties, because investors had been buying fewer houses recently.

But it's warned new buyers would likely feel the greatest pain, should economists' predictions that the Reserve Bank will raise the cost of borrowing, because of creeping inflation.

ASB, ANZ, BNZ and Westpac have already responded to the spike in inflation, by increasing their home loan rates last week.

CoreLogic Chief Property Economist Kelvin Davidson says the rates increases may come as a shock.

He says it doesn't take much of a change in interest rates to have a big impact.