This means that OCR increases will be felt more immediately by existing as well as new mortgage borrowers. Second, a higher starting level of mortgage debt relative to incomes means that any given interest rate increase will have a larger impact on monthly debt service payments, relative to incomes, than in the previous cycle.
This latter point is shown in Figure 9.2 where the debt service ratio for a typical new borrower (with a 20 percent deposit) is projected to rise more sharply, relative to the interest rate track, than in the previous cycle. 10.