What does this mean?

Higher interest rates on loans.

Mortgage costs are usually one of the biggest expenses in a household so by making a mortgage more expensive the theory is that people will have less spare money to spend on goods and services so the prices of those things don't go up as fast.

So how high will rates go and should you panic?

Historical data suggests the max will be a 1-year rate of 7%. However, this will only be temporary if it does go that high.

Should you wait to buy?

As long as you can afford a mortgage at that level of 7% (which is what the banks test your mortgage at) then you should be fine as long as your situation doesn't change dramatically (ie have a baby).

If the bank says "yes" then you should take comfort in the fact that the guys giving you money are confident you can pay it back, but what if you can't?

Even if you do miss a few mortgage payments it is an absolute last resort for your bank to take back your house and sell it as a mortgagee sale.

This podcast episode explains exactly what to look out for, and how you can make the most of the deals in this current buyers market.

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