Brodlach wrote:I do see your point Booney and I could spiral this conversation out of control but I will say many people who borrowed for homes over the past 5 years borrowed at record low interest rates and borrowed too much. Didn’t factor in the rates would return to “normal” levels.
Price gouging by goods and services has to be close to record levels IMO as we can see from profits by big companies
I have written, on here, about this before.
Going from memory (because I'm not going to search for the actual numbers) 18 months ago when interest rates were around the lowest, BOQ were using a nominal rate of somewhere around 5.5% to assess your ability to service a mortgage. 12 months later, when interest rates were rising, they lifted that to 7.5%
Current rates are around 5.5%. The difference is the cost of living has also, dramatically, increased.
Last week, I asked the same economist about that and he said they had factored in higher inflation because it was bleeding obvious we were going to have an inflation problem due to all of the money stimulus.
No sane person ever thought interest rates would stay that low.