In this episode, Russell Peter is joined by Tim from Nexus Money to discuss the current financial market and the impact of rising interest rates on borrowing capacity.
Tim explains that interest rates have been on the rise, with some people’s rates increasing from 2% to 4.5–6%. This is having a significant impact on borrowing capacity, as stress testing is now being done on higher rates. As a result, buyers are having to reduce their purchasing power and vendors are having to adjust their expectations.
Tim gives an example of a first-time homebuyer who was able to borrow significantly more money 12 months ago than they would be able to today. He suggests that the solution is for people to try to increase their income in order to be able to afford to borrow more money.
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