THE latest interest rate hike will cost the average Hepburn Shire family with a mortgage an extra $35 a month.

John Evans Real Estate manager John Evans said the rise would affect first home buyers more than someone with a current mortgage.

"The extra payments might deter people from making a decision to stop renting and buy a house," Mr Evans said.

He also said the interest rate issue was often blown out of proportion.

"When car repayments increase nobody seems to say much in the media. For some reason everybody is only concerned about houses.

"I think people already paying off a mortgage can find a way to fit in the increased payments. It's the people who are considering buying their first house that are turned off by the increase.

"It's just another hurdle for them," Mr Evans said.

Ballarat MHR Catherine King said Hepburn Shire families were entitled to feel angry with the Federal Government over the latest interest rate rise.

"At the last Federal election John Howard promised to keep interest rates at record lows. Since the 2004 Federal election, Hepburn families with an average mortgage are paying $150 more per month on their mortgage," Ms King

said.

"The rate rise will be particularly devastating for the 22 per cent of home owners in the district who are already paying more than 30 per cent of their income on their mortgage," she said said.

"It is becoming increasingly clear that the prime minister has fallen deeply out of touch with families in the Hepburn district," Ms King said.

Liberal candidate for Ballarat Samantha McIntosh defended the increase and said home owners were better off than when Labor was last in office at a federal level.

She said mortgage holders were saving $450 compared to when Labor governed the country.