1. If 1 in 3 loans were written on lies why is the default rate not astronomically higher than it is?
2. If rates are to climb to 8% let alone 18% what is going to be the driver? RBA cash rate is used to control GDP growth/inflation no signals pointing to this exploding any time soon. Note 5 year fixed rates are available sub 5% which is a good indicator of the longer term funding costs which are a mixture of domestic deposits and foreign sourced capital.
3. Further to 2 we have stagnant/low wage growth this is another factor that will keep inflation low. Most analysts are now cutting predictions of 2 rate rises in 2018 to 1 November or none with maybe a May 2019 rate rise at the earliest.
Dodgy brokers definitely exist but if the problem was really 1 in 3 we'd being seeing mortgagee sales every day of the week which just isn't happening.
