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%.
This really helps me understand the situation better. I appreciate the time and thought put into this response. It’s times like these I am thankful I didn’t overspend. I listened to my parents and bought a house that wasn’t flashy but was suitable for my situation. Most people I know did not do that, and I constantly wonder how they are making ends meet. Some of them make less than I do.
Just imagine how young people are coping in other countries without 30 year fixed mortgages. Many of them are coming up for renewal with big rates rises.
The US has 30 year fixed mortgages. We don’t. Ours are typically fixed for up to 5 years. Then you get renewed at whatever the current rate is for the remainder of the mortgage.
We actually do have 30 year mortgages too, they just arent common because they cant be insured and you need to have a larger down payment (I think its 20%). The US hands them out like bubblegum. We all know how diligent they are with their lending, but it’s not like we are really any better here either.
I’m aware we have 30 year amortization mortgages. When you say 30 years, do you mean that the term is 30 years? That is, the interest rate is kept fixed for 30 years?