One factor that makes things even worse here in New Zealand is, from what I've heard in the US a home mortgage is usually at a fixed interest rate for the entire term - is that correct? Whereas in New Zealand the rate will usually be fixed for a maximum of five years.
So you might have a 30-year mortgage fixed at 3.5%, but if interest rates go up, then in year five you might start paying 5%, and maybe you can't afford it anymore. I suspect the banks require a bigger buffer between payments and income than they do in the US to allow for potential interest rate increases, but that only works up to a point.
So you might have a 30-year mortgage fixed at 3.5%, but if interest rates go up, then in year five you might start paying 5%, and maybe you can't afford it anymore. I suspect the banks require a bigger buffer between payments and income than they do in the US to allow for potential interest rate increases, but that only works up to a point.