I wonder what the average term and interest rate this is all at. Variable versus fixed. This cannot end well.

The chart reminds me of a PID regulator that's tuned a bit aggressive, or with delay on the feedback line, responding to a sudden step change. If this system behaves anything like one, the oscillations will either attenuate over time, or run completely out of control, depending on the amount of amplification. Since we still only have about one full cycle, around the same level as the step, it's very hard to tell which.