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%.

  • NotAnArdvark
    48·
    1 year ago

    They’re talking debt-to-disposable income ratio, which ChatGPT tells me means “Debt over in income after tax.” I don’t think this is necessarily descriptive of someone’s financial situation. I’m over 400% debt-to-disposable income, but I could pay off my mortgage in a week if that made financial sense.

    If you’ve got investments returning more than your loan rate costs you, I don’t know why you’d pay down your loan any sooner than you had to.