During the Melbourne Cup transmission there was an announcement that the Reserve Bank of Australia had decided to increase interest rates by .25%.
In the announcement was the message that some people may need counselling because of the soaring interest rate rises.
Don't people factor in a certain amount of interest rate rises when they take out a loan? Isn't that what a sensible person would do, calculate the amount they can pay back comfortably, factoring in rate rises (particularly if interest rates are at a 22 year low), and deciding what they can afford to borrow?
Please, tell me I'm correct in this assumption.