Just as an exercise, I have been getting an idea of how much money I could borrow using some online mortgage calculators. I have checked several of them and it seems I can borrow as much as $572,000 over 30 years (interest rate of 5.75%) on a combined income of just over 80k.
Is this actually a true indication of what the banks are lending?
Doing some calculations, thats over 50% of net income gone just paying the mortgage.....$3300 a month.
My current rental is $2000 a month less than that (defence housing). I doubt I would be able to sustain paying $3300 a month even if mortgages stayed at the rates they are now.
I also doubt that many of the recent home buyers will be able to service their massive loans.
Also noticed that each .25% increase in interest rates means I can borrow about 10k less than before the rise.
If people can not borrow as much as they did before the interest rate rise, how do prices keep rising?
We will see
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Just as an exercise, I have been getting an idea of how much...
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