CAIRNS homeowners are preparing to tighten their belts as further interest rate hikes loom.

Economists are tipping the Reserve Bank to lift the official rate by a quarter of a percentage point to 7 per cent today, prompting fears that many current owners will suffer mortgage stress and aspiring buyers will be locked out of the market.

Herron Todd White property analyst Rick Carr said first home-buyers should shop carefully to avoid becoming a victim of the rates rises.

But he said the improving value of Cairns homes would soften the blow for mortgage holders.

"Be prepared to revise what you can afford when you do all your finances," Mr Carr said.

"What you can afford at today's interest rate you might not be able to afford at tomorrow's interest rate.

"However, it's my belief that house prices are going up at a faster rate than repayments."

Residents of Harwood Cl, Brinsmead, yesterday were expecting the hike but still dreaded the news.

"It'll be huge," Kerri Woodman, who bought a house with husband Steven in the quiet cul-de-sac in March last year, said.

"Even though it's only the two of us, it'll still have an impact," Ms Woodman said.

"I don't work. If it keeps going like this, I'll have to think about getting a job."

Peter and Liz Pawsey, who have investment properties, believed the interest rates rises would affect "every man and his dog" because many landlords would be forced to increase their rents.

They questioned the Reserve Bank's move to increase rates when "the rest of the world" was dropping their interest rates.

"If the Reserve Bank increases interest rates, they've lost the plot," Mr Pawsey said.

Neighbours Michael and Cheryl Lee recommended first home-buyers get ahead of their loan repayments to counter future financial hurdles.