Big4 Standard variable rate average around 6.7% (expected to rise to 8.25% by years end).
Just take the average "young persons or couples" who typically has no equity when they got sucked into the Ponzi scheme called the FHOG. Many have taken 400K range loans and in many instances significantly more.
(Remember we are still at very expansionary rate settings right now). Let's be conservative and use a very simple linear formula of 7.5% variable rate (for mid 2010) on 500K for an average no frills FHB home on the eastern seaboard. That's $37,500 in annual interest (of "after tax" pay).
$37,500 divided by 52 weeks, it's $721/week. One can rent (not a puny entry-level FHB house) but a full size executive home in my neck of the woods (it's a nice suburb) for that money.
Of course, the property dead-enders are predicting price rises and don't see a crash coming.
Even if I am half right, they are in deep sticky date pudding !
