Millennials who are saddled with debt such as costly mortgages might well bear the brunt of higher interest rates in the months to come, a new RBC report argues.

Older millennials, adults aged 35 to 44, had debt-to-disposable income ratios around 250 per cent in 2019, while Freestone noted that metric was roughly 150 per cent for the same age group in 1999.

Can confirm we’re sitting around 250% but this is after exercising significant restraint to not take on as much mortgage as the banks would have given us. Everyone I know who bought over the last couple of years went all out and I can’t imagine them being any lower than 300-350%.

  • Avid AmoebaOP
    21·
    1 year ago

    The way I understand it, there are two main implications. First, the higher the debt load, the less people will spend in a rising interest environment. As their (our) mortgage payments go up, we’ll spend less on anything else. The larger the effect, the more significant it is for the rest of the economy. Second, the higher the load, the more people will default or sell in a rising interest environment. The consequences of this one are more varied.