Let's say you have a $1m home loan and $15k of credit card debt:
- Person USA - The home loan is fixed, and rates increase by 5%.
- Person AUD - Rates increase by 5%.
Person USA
- Increased borrowing cost for their $1m home loan = $0 (as it's a fixed rate)
- Increased borrowing cost for their $15k of credit card debt = $750
- Total impact +$750/year
Person AUD
- Increased borrowing cost for their $1m home loan = $50,000
- Increased borrowing cost for their $15k of credit card debt = $750
- Total impact +$50,750/year.
Despite increasing rates by less, the impact is 67x more.
Moral of the story is, you can't directly compare interest rate increases in a fixed rate world to that of a floating rate world which is there the RBA lives.
Let's say you have a $1m home loan and $15k of credit card...
-
- There are more pages in this discussion • 23 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Add FMG (ASX) to my watchlist
 (20min delay)
|
|||||
|
Last
$18.40 |
Change
-0.230(1.23%) |
Mkt cap ! $56.43B | |||
| Open | High | Low | Value | Volume |
| $18.86 | $18.95 | $18.12 | $188.6M | 10.19M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 1 | 82834 | $19.68 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $17.39 | 32022 | 4 |
View Market Depth
| Last trade - 15.59pm 28/08/2024 (20 minute delay) ? |
| FMG (ASX) Chart |