That is because would-be borrowers' daily expenses will be higher, and as a result some people might not be able to scrape over the threshold and become eligible for a loan.
Stress testing for mortgages could also take a leap.
These comments came as the CPI rose by its highest annual rate in 32 years: 7.3%.
The driving factors behind this were rising household and transport costs.
For example, prices for the construction of new dwellings increased 18% in the year until June. The cost of petrol went up 32%.
All this could rebound on house buyers.
Tauranga adviser Rupert Gough of The Mortgage Lab says the cost of living for mortgage clients will have risen and it will be a big challenge for some people to get those costs down to meet the requirements of a loan provider.
“We never like to say no to a client, but there may be more mortgages being declined because people just can't get their expenses down. So there will be a bit of pain around that I guess.”
Another adviser, Bruce Patten of Loan Market, thinks the stress test will be affected by the latest jump in inflation.
“Inflation potentially pushes the banks' test rates higher, because the cost of living is higher so they might adjust that rate,” Patten said.
“It is already in the sevens, so it is getting up there already.”
Meanwhile, the higher inflation figure could make the Reserve Bank even more hawkish than before, according to economists from the ASB.
It has revised its official cash rate (OCR) forecasts from one to two 50 point rises this year, with a final resting point of 3.75%.
Westpac is slightly more dovish, forecasting just one more 50 point hike, with the OCR plateauing at 3.5%. Kiwibank economists are also sticking at 3.5%.
However, ANZ now expects the Reserve Bank to increase teh OCR by 0.50% three more times this year, taking it to 4% by November.
But whichever number prevails, the effect will still be to push mortgage rates higher, even if the impact is sometimes delayed by large numbers of people being on fixed rate mortgages.
Meanwhile several economists have drawn attention to the difference between imported inflation and home grown inflation, and think it is worrying.
Imported, or tradeable, inflation, rose to 8.7%, the highest level on record. Domestic inflation was 6.3%, also the highest on record.
But economists note imported inflation is outside the government's control, but high domestic inflation is expected to become the subject of strong political criticism.