WelI am 60 and worked thru the 70s,80s,90s,2000s in fact still working. In the 70's the mortgage rate was about 10-12%, in the 80's it was as high as 20-21% but levelled back down to about 12% by late 80's, I remember in 1990 interest was 14% again. Only in the 2000's has the rate became historically low. What has everyone done? Paid more at lower interest but the payments are just as high at the "False Low Interest rate." I have to believe the average thru my lifetime was 10%+, do I believe it will stay this low? No.
Lets say it returns to the average 10% which it could over 2 or 3 years and there will be a lot wishing they never paid such high house prices. A quick example a $300,000 mortgage means $1000 has to be paid back each month on a 25 year plus interest. 3% on 300,000 is 9,000 or near 800 month interest for a total payment of $1,800.00. At 10% the interest is 30,000 or 2500 interest per month plus the 1,000 on principal for a total payment of $3,500 month. Now your house payment doubled can you pay it? That is how the bubble bursts. Grant Devine was elected into Saskatchewan because they paid the mortgage rates down to 13.25% I believe that was in 1983.

Banks grant these mortgages to people on their own acceptable total debt service limits. If overextended customers exist it is because the banks have allowed it. Don't put all the blame on the people who want to own a home, they go in, fill out an application form and it is either approved or not. The whole process is entirely in the hands of the lender.

This has nothing to do with banks… most of credit cards have extremely high interest rate, however people still mismanage their money and keep buying without thinking of how to pay back these debts…
It is not a greedy banks, but stupid people.

This has been front page news for 3 years and we still see families with a 65K to 85K yearly income buying $350,000.00 homes. When it hits the fan they will be blaming the banks and the government for allowing them to do it.