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Is there any more bearish indicator for the Australian economy than the idea that a 7% minimum stress test on mortgages is unsustainably tough, but a 2.5% buffer above current rates of ~4.5% will bring manna from heaven?
My maths is a bit rusty but, last I checked, 4.5+2.5=7.
My maths is a bit rusty but, last I checked, 4.5+2.5=7.
Now I know only the little people pay standard variable rates. So we're probably more in the range of 6%, or less if further cash rate cuts get passed on.
But still, what we're saying here is that if you're assessing serviceability, it's safe to assume that at no point over the next five years or so should we assume the cash rate is going to go much higher than it is now.
I think that's probably realistic but it's also a bit 😱😱
I think that's probably realistic but it's also a bit 😱😱
