-#+date: 2022-05-09 18:48:00 +0800
+#+date: <2022-05-09 18:48:00 +0800>
#+filetags: economics finance law Belgium Australia
-#+title: Monetary policy and mortgage products
+#+title: Monetary policy and mortgage products.
In its latest
-[[https://www.rba.gov.au/publications/smp/2022/may/pdf/statement-on-monetary-policy-2022-05.pdf][statement
-on monetary policy]]
-([[https://web.archive.org/web/20220506111153/https://www.rba.gov.au/publications/smp/2022/may/pdf/statement-on-monetary-policy-2022-05.pdf][Internet
-Archive]]), the Reserve Bank of Australia highlighted that households in
+[[https://www.rba.gov.au/publications/smp/2022/may/pdf/statement-on-monetary-policy-2022-05.pdf][statement on monetary policy]] ([[https://web.archive.org/web/20220506111153/https://www.rba.gov.au/publications/smp/2022/may/pdf/statement-on-monetary-policy-2022-05.pdf][Internet Archive]]), the Reserve Bank of Australia highlighted that households in
Australia have much higher private debt than before. Total private debt
-is approximately [[https://stats.bis.org/statx/srs/table/f3.1][120% of
-GDP]]
-([[https://web.archive.org/web/20220505031215/https://stats.bis.org/statx/srs/table/f3.1][Internet
-Archive]]), roughly double Belgium's.
-[[https://www.abc.net.au/news/2022-05-02/rba-will-raise-rates-but-not-to-levels-experts-are-predicting/101029534][Analysts
-hint this will restrict by how much the central bank will be able to
-raise the cash rate target]]
-([[https://web.archive.org/web/20220509111508/https://www.abc.net.au/news/2022-05-02/rba-will-raise-rates-but-not-to-levels-experts-are-predicting/101029534][Internet
-Archive]]) to battle rising inflation in the near future.
+is approximately [[https://stats.bis.org/statx/srs/table/f3.1][120% of GDP]] ([[https://web.archive.org/web/20220505031215/https://stats.bis.org/statx/srs/table/f3.1][Internet Archive]]), roughly double Belgium's.
+[[https://www.abc.net.au/news/2022-05-02/rba-will-raise-rates-but-not-to-levels-experts-are-predicting/101029534][Analysts hint this will restrict by how much the central bank will be able to
+raise the cash rate target]] ([[https://web.archive.org/web/20220509111508/https://www.abc.net.au/news/2022-05-02/rba-will-raise-rates-but-not-to-levels-experts-are-predicting/101029534][Internet Archive]]) to battle rising inflation in the near future.
Most mortgages in Australia are contracted on a variable rate, or fixed
only for the short term. As such, rising interest rates not only affect
people taking out new loans - they also affect the amount all other
indebted households need to repay. This contrasts with Belgium for
instance, where in the first 3 months of 2022
-[[https://www.febelfin.be/nl/press-room/ook-eerste-trimester-van-2022-record-aan-hypothecaire-kredietverlening][93.5%
-of mortgage contracts had a fixed term over the entire duration of the
-contract]]
-([[https://web.archive.org/web/20220509115728/https://www.febelfin.be/nl/press-room/ook-eerste-trimester-van-2022-record-aan-hypothecaire-kredietverlening][Internet
-Archive]]). Only less than 1% of contracts closed in this quarter has a
+[[https://www.febelfin.be/nl/press-room/ook-eerste-trimester-van-2022-record-aan-hypothecaire-kredietverlening][93.5% of mortgage contracts had a fixed term over the entire duration of the
+contract]] ([[https://web.archive.org/web/20220509115728/https://www.febelfin.be/nl/press-room/ook-eerste-trimester-van-2022-record-aan-hypothecaire-kredietverlening][Internet Archive]]). Only less than 1% of contracts closed in this quarter has a
rate varying periodically. This despite strong consumer protections
built into the Code of Economic Law
-[[https://www.ejustice.just.fgov.be/cgi_loi/change_lg.pl?language=nl&la=N&table_name=wet&cn=2016042201][see
-art VII.143, § 2 to 6 in the Flemish publication]]
-([[https://web.archive.org/web/20210617021917/https://www.ejustice.just.fgov.be/cgi_loi/change_lg.pl?language=nl&la=N&table_name=wet&cn=2016042201][Internet
-Archive]]): few of them vary immediately upon changes in the cash rate
+[[https://www.ejustice.just.fgov.be/cgi_loi/change_lg.pl?language=nl&la=N&table_name=wet&cn=2016042201][see art VII.143, § 2 to 6 in the Flemish publication]]
+([[https://web.archive.org/web/20210617021917/https://www.ejustice.just.fgov.be/cgi_loi/change_lg.pl?language=nl&la=N&table_name=wet&cn=2016042201][Internet Archive]]): few of them vary immediately upon changes in the cash rate
as the minimum term between changes is at least a year, and the updated
interest rate can never exceed twice the original rate.