Well, it was planned in the sense that when they cut rates to help keep people spending during Covid (and avoid a mother f**ker of a recession), they knew what one day rates would rise. What they f**ked up was telling people that they thought rates wouldn't have to rise til 2024 (at the time financial markets didn't believe that and they were right). The RBA have only limited room to move....what other country's central banks do necessarily has quite a bit of influence on the RBA's choices (interest rates affect exchange rates and exchange rates affect whether our businesses can sell their shit overseas etc).
But....when money's cheap, people do stupid things. Then they whinge about it.
What I assumed was they'd go up. But not as much as have. So they where under 2%. I looked at it and went yeah ok I will lock in for 4yrs. They most likely won't go up in that time ( Ends Dec 24) But they have. I also thought they'd only go up maybe 1 -2 % so variables would sit around the 3.5-4% range.
I think now it's hit 7% and that's the issue. Not them going up but by the amount they have.
I am not one who borrowed a whole heap so for me personally it will be under control and not a huge issue. Plus I am in a line of work where there is plenty and if I need more $ I can just do a few more hours quite easily.
But I know people who borrowed 750k to get their first home and on salaries. Every rise is $35 a week out of pocket. May not sound a lot but there has been 11 so $400 gone or 20k a year.
I feel for them. They didn't go over their heads.
I also know of someone who took a 1.5mill. Like you said people do stupid things when moneys cheap. I think some people also have champagne taste on beer money.
