Australia along with UK is facing a Lehman 2.0, it seems Australia might take the crown for this recession in terms of mortgage defaults and housing collapse. There IO Loans ( Interest-Only ) is gonna absolutely destroy them, few links explaining the situation unfolding in Australia for 2019 going forward, was years in the making. https://www.fool.com.au/2018/09/21/...only-mortgage-defaults-in-the-next-few-years/ https://www.yourmortgage.com.au/mortgage-news/interestonly-loans-become-a-ticking-time-bomb/258179/ https://www.abc.net.au/news/2019-01-16/australia-to-see-worst-fall-in-house-prices/10720406 UBS says the stress will come when IO loans mature and revert to principle and interest (P&I) loans when repayments jump, according to a report in the Australian Financial Review. It is estimated that there are 1.5 million borrowers on IO loans worth nearly $500 billion which will convert to P&I loans over the next four years. According to ASIC’s mortgage calculator, borrowers on an IO loan of $300,000 at 4% interest is likely to see their monthly repayments jump from around $1,000 to circa $1,700 (the longer your IO loan is for, the greater the increase when it converts to P&I). In case you missed it, that’s a 70% increase in mortgage repayments and that’s not factoring in an increase in interest rates. This probably explains why UBS believes 18% of respondents to its 2018 mortgage survey won’t be able to meet their monthly repayments when their IO loan rolls over. That equates to around 270,000 defaults just on IO loans. Throw in falling property prices, and this default estimate might prove to be somewhat conservative. We’ve already seen almost all banks, including our two biggest mortgage lenders Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC), lift rates independent of the Reserve Bank of Australia. Note: Read New Green Deal thread in Politics Section, Spread the word to friends and family, do not let this deal see the day of light!