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Similar to what Keith said, if the borrower can afford to pay back the loan then I don't think the loan is excessive. They also have an extra 12% capital growth last year to improve their LVRs. It will all depend on individual circumstances.

Debt is a tool. Like a knife or a rope. What you do with it may be either bad or good. Using debt to purchase assets that provide cashflow and/or capital gains exceeding the total cost of the debt, is financially beneficial. Using debt to purchase consumable items such as boats and holidays...

But is that 'excessive', and if so, why? Lenders normally factor in a 2% IR increase when working out what people can pay back, so there should be room for at least another 1% rise in rates before some people really feel any discomfort. I think the majority though could handle even higher rises...

Hi hobo-jo, how do you define 'excessive' borrowing, and how do you know most FHBs borrowed 'excessively'? I doubt the younger generation saw a great financial catastrophe at all. Australia was only impacted to a limited degree. Most young people would have felt nothing other than the...

Well, we never hear from nonrecourse any more. Or Token Funder. Or YieldMatters, Hired Goon, and all the other gloomers who used to come over here to tell us the world was about to end. I think that says a lot. RumpledElf, Australian house prices have been rising in real terms for 60 years...