Times are tough all over

[Aliantha]

We call them variable rate mortgages, and in Australia, a variable rate is the most common mortgage you'll get and pretty much always has been.

I note tw, that having fixed rate mortgages hasn't saved the US economy, or any other country's economy.

Also, regardless of whether mortgages are fixed or variable, you surely must realize that as interest rates go up, more people are locked into higher mortgage repayments for the same thing their neighbour has at a lower price. And of course with an inflated economy which Australia has had for many years now, housing prices are inflated which of course means that people have been paying even more on the capital aside from the interest at whatever rate it's at.

As I said, it's not just housing interest rates which have contributed to this issue. It's fuel costs also. Every household in Australia has much higher expenses than it did 3 or 4 years ago. Do you think fixed rate mortgagees should have realized that was going to happen?

You asked for an explanation and I've given you one. Personally we have a fixed rate mortgage which is now lower than it would have been if we'd taken a fixed rate mortgage out six months ago when we bought this house. The recent interest rate drops means we're saving over $250/month which goes a long way towards paying our utilities.

It doesn't matter what sort of mortgage you have if you haven't allowed yourself some breathing space for fluctuations in the market.