PHOTO: 123RF First home buyers often find themselves well in “mortgage stress” territory, with little money left over to live on, or cope with emergencies, or property maintenance.
OPINION: Nearly 40 percent of new mortgage loans are to borrowers with debts that are five or more times their before-tax income.
Despite very low mortgage rates, loans of this magnitude immediately put borrowers into “mortgage stress”, which is the condition of spending more than 30 per cent of pre-tax income on housing.
In our era of high house prices, our focus has been on the stress of not being able to get a place (and a mortgage), not the stress of taking on an unreasonably big mortgage.
Those who have a mortgage these days, we think, are the fortunate ones, and have paid the entry fee to join the club of never-ending capital gains.
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