The ongoing process of risk reappraisal and balance sheet adjustment in financial markets is likely to last for some time, and it is highly uncertain what impact it will have on the real economy. Indeed, the risks to the outlook for economic growth are linked to and are interacting with the uncertainty surrounding the ongoing risk reappraisal in financial markets.
However, borrowers should remember that a fixed-rate mortgage will reprice a number of times over the life of the mortgage and, while asset prices can rise and fall, debt endures.   The elevated levels of household debt require continued vigilance. Since 2008, the federal government has taken a series of prudent and timely measures to tighten mortgage insurance requirements.