the coalition's cheap rates!!!!!!!!!

  1. bbm
    2,264 Posts.
    Now why would our treasurer say that rates under 10% are still cheap??.....hmmmm

    Let's have a little look ourselves since no one wants to publish actual statistics.

    Current average home loan: $210000
    Average weekly earnings: $980
    Current major bank interest rate (prior to todays rate rise): 7.07%
    Loan term: 25 years

    Debt servicing ratio: 35%

    If rates were at 9.99% (remember that they are still cheap under 10%) the debt servicing ratio becomes!!!, still cheap.

    Cross reference back to 1989 when rates were 18%, the ratio was 31%.

    That's just home loans, excluding other forms like credit cards and car loans which were not that common 15 years ago.

    So why I ask you Mr Treasurer cannot you foresee any problems with higher rates?

    Moto for the day....JUST KEEP BORROWING!'s all good.
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