PM's rates ace is a house of cards: "And while it remains true that mortgage interest rates are still well below what they were in 1996 - let alone 1989 - it's also true that in that time, the price of houses has doubled and the size of the average new loan has almost doubled. (Since 1989, the average size of a new loan has almost trebled.)

"Several surprising facts flow from this. One is that the burden of household interest payments is almost as heavy today as it was in 1989, when the mortgage rate was 17 per cent. Back then, household interest payments accounted for a record 8.9 per cent of household disposable income. They fell to a low of 5.7 per cent in late 1993, but by June quarter this year - that is, before last week's rate rise - they had risen to 7.9 per cent.

"And this means that, despite all the Government's boasting, the interest payments burden is already heavier than it was when Labor was kicked out in March 1996 - 7.6 per cent. (You will hear claims from Labor that the mortgage interest payments burden is already a lot higher than it was in 1989 - 6.4 per cent of disposable income now, compared with 5.1 per cent then. These figures focus on mortgage interest payments, ignoring other interest payments on credit cards and personal loans. But this makes them misleading because, whereas in the old days people borrowed separately for a new car or overseas holiday, these days they tend to just add it to their home loan.)"

PM's rates ace is a house of cards: "And while it remains true that mortgage interest rates are still well below what they were in 1996 - let alone 1989 - it's also true that in that time, the price of houses has doubled and the size of the average new loan has almost doubled. (Since 1989, the average size of a new loan has almost trebled.)

"Several surprising facts flow from this. One is that the burden of household interest payments is almost as heavy today as it was in 1989, when the mortgage rate was 17 per cent. Back then, household interest payments accounted for a record 8.9 per cent of household disposable income. They fell to a low of 5.7 per cent in late 1993, but by June quarter this year - that is, before last week's rate rise - they had risen to 7.9 per cent.

"And this means that, despite all the Government's boasting, the interest payments burden is already heavier than it was when Labor was kicked out in March 1996 - 7.6 per cent. (You will hear claims from Labor that the mortgage interest payments burden is already a lot higher than it was in 1989 - 6.4 per cent of disposable income now, compared with 5.1 per cent then. These figures focus on mortgage interest payments, ignoring other interest payments on credit cards and personal loans. But this makes them misleading because, whereas in the old days people borrowed separately for a new car or overseas holiday, these days they tend to just add it to their home loan.)"