UniversalTrader said: As I said point was simple cut backs can save enough money to cover the rate rises. Also anyone borrowing even at the lowest rates would have had a buffer for rate increases (even if it is just the one imposed by the bank through their lending criteria).
Simple cutbacks? I've extrapolated/shown that the increases (in interest payment ALONE) over the last 12 months would be approximately 10% of 1 persons take home pay or around 8% of household income take home pay, you think that simple cutbacks will cover this? Not for those on low to median wages who were purchasing with the governments money, who otherwise would have not been able to do so. This is without taking into account other factors like rising fuel costs, etc. I personally have no issues financially, but would not be able to cut back $12 per day in my spending habits without a severe quality downgrade in life, hate to think what it would be like to do this in a struggling FHB situation with already large mortgage repayments.
As I've already pointed out buyers from 12 months ago would already be hitting interest rates around the banks 1.5% buffers when calculating serviceability...banks as I understand it use the poverty lines/index to calculate living costs. Have you ever had looked at this figure UT?
