The Consumer and Trade Union is disappointed at the 1.25 percentage point rise in the OCR, which will lift the cost of a $200,000 floating rate mortgage by about $10 per week.

Interest rates are forecast to continue to rise, with 90 day interest rates predicted to increase from the current 2.9% percent to 4.2% percent in March 2011, and 5.6% percent in March 2012, further increasing the cost of mortgages.

CTU Economist Bill Rosenberg says that banks are continuing the tighter lending criteria they established during the financial crisis, and the rise in interest rates will not help.