Although political messaging, particularly from the National Party, is targeting the middle-income families squeezed by rising interest rates, this isn't as many people as you'd think, says economics commentator Bernard Hickey.

Speaking to Anna Burns-Francis on Breakfast today, Hickey said that although costs have risen for first home buyers who got into the market when prices were high, "they can afford to pay it".

"Remember the banks weren't allowed to lend them so much that they couldn't afford it," he said.

"Often they were tested with interest rates of 6 or 7% and that’s just where it’s gone."

Hickey said aside from "a couple hundred of people in the last couple years" who may have lost their equity, most homeowners will be fine. "They’ve got a lot of equity in their homes, their incomes are rising and actually the bank made sure they could afford it before they could lend them the money."

"Sure they may not have the overseas holiday, they may not have the seven lattes. Down to two or three lattes maybe."

He believes those really carrying the financial burden right now are renters.

"We've got a good 45% of our renters paying more than 30% of their income in rent." However, "it's the median voter that really matters in elections. A group of about 10 to 15% - they tend to be homeowners in the provinces in the suburbs."

"Rising mortgage rates threatens the key game in New Zealand… If mortgage rates are going up, where's the leveraged gains on residential land price rises?"

Hickey described New Zealand's economy as "a housing market with bits tacked on".

Because of the way New Zealand's banking sector operates, banks tend to raise interest rates at a higher rate than the OCR, creating bigger margins of profit, banking expert Claire Matthews said.

"It does tend to be a bigger margin than you get overseas... the OCR isn't the main funding source for the banks in New Zealand so they are borrowing from international markets."

Hickey also said studies show banks "increase their net interest rates margin when interest rates are rising".

Asked whether this was reasonable, Matthews said it could be addressed through competition.

"Kiwibank was introduced 20-odd years ago with that purpose and potentially what we need to be doing is trying to facilitate Kiwibank to play a bigger part in the market," she said.

However, "it would cost the govt a lot of money to provide it with the capital it would need".

Matthews drew attention to the other side of the market.

"We focus a lot on the borrowers because they're the ones that feel the pain of the higher interest rates in terms of their repayments but we need to remember there are depositors as well, people who are saving for their retirement or for other purposes.

"It'd be good if they were getting a slightly higher interest rate. That would also have an impact of reducing bank margins," she said.

Still, Matthews, unlike Hickey, believes New Zealanders are afforded a fair amount of competition.

"There are four big banks and they do compete quite hard between themselves... there are other options if they're really concerned."