In Market Focus, it says not surprisingly, rates markets were little changed on the OCR move, which had been well signaled.

ANZ says looking ahead, the big question is, how will mortgage borrowers respond, now that the Reserve Bank has kicked off the rate hike cycle?

"We doubt we will see the same kind of panic we saw last year when rates bottomed out. Mortgage rates have been rising steadily and the sense that there's a bargain to be had has faded."

BNZ Weekly Overview says it expects steady rate rises toward 6% come the first part of 2012, which means floating interest rates would rise about 3% or so between now and then.

Underlying the rate change, BNZ believes there would have been a desire to build an interest rates buffer in case the world turns to custard again and they need to react.

ASB Business Weekly says with signs of easing risk aversion in offshore markets, domestic interest rates are likely to edge up this week.

It also says the fact that a greater proportion of borrowers are now on floating mortgage rates will "reduce the extent to which the OCR will need to be increased relative to previous cycles".

ASB says this is in line with its expectations that OCR increases will be in 25 basis point increments this year and eventually peak at 5%.

"Given continued uncertainty in the European economy, markets are currently pricing in some risk of a pause at some point in this cycle."

J P Morgan Weekly Prospects says last weeks move by the Reserve Bank was a surprise as it expected the first hike to be in July because of uncertainty offshore and pockets of weakness in the domestic recovery.

Westpac Weekly Commentary believes the decision to fix or float remains finely balanced as floating rates remain lower than short-term rates at the moment, but they are likely to increase faster as the Reserve Bank increases the OCR.

"Fixing if even for a short term, has the advantage of greater certainty around cash flows, at a time when floating rates could be rising rapidly.

"Repaying more than the minimum amount and spreading the loan over a mix of terms can also help to reduce the overall risk around uncertain future rate changes."

BNZ says there is no wonderful money-saving opportunity in the market place. You either stay floating or fix one to three years and either way you get hit in two to three years by high floating rates and higher fixed rates, and if you fix now you pay much more than current floating rates.

"There is simply nothing canny you can do to save interest expense for the next few years.

"But those who have held off fixing simply to enjoy low floating rates as long as they can - there is no point waiting any longer."