#[0] oooof.
Discussion
The sales executive bought a $2 million house in the inner-west Sydney suburb of Haberfield in June 2021. He borrowed the lot, with $400,000 on a variable rate, which he has paid off, and the other $1.6 million on a fixed rate of 1.79 per cent. But the fixed rate will end in June.
His repayments will increase from $69,000 a year to nearly $110,000, based on the current variable rate of 5.5 per cent.
Same story in Spain back in 2008-2012. But fixed rate interest mortgages have always been available, and I'm sure they have in Australia too. It's people's short-term outlook, lack of education and, yes, greediness that cause them to go for floating rates.
Doesn't mean the real estate market is not hyperinflated in Australia, as it is in Spain even today, and pretty mucy everywhere. But people only make it worse.
Ouch
Ugly
Unfortunately, he's one of many.
He at least is making preparations. Most will be head in the sand until the bailiffs start knocking.
People will run their savings to zero before they lose their house.
Then they'll lose their house AND have zero.