re: hanrahan, tejay
Sorry hanrahan, wasn't that clear looking back, I wrote the 2nd part.
Anyway my point was that wages have not risen in line with the increase in average mortgage debt, ie; 80% in 5 years.
So any increase in interest rates is going to put extreme pressure on wages having to increase.
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Back in the days when bank managers were real people I was told regardless of the current rate budget and allow for an average of 10% over the term of the loan (25 years)
10% on 100k = $908 mth
10% on 180k = $1635/mth
Now thats serious inflation without wages having moved at a comparable rate!!
Make no mistake , rates will rise and if you don't think 10% is on the cards within 3 years, lookout!!
