In Sydney, where the median home price is more than A$1.1 million, mortgages of A$1m are not uncommon. This, plus the virtual certainty last week's rate rise will be the first of several, makes the sums start to look very different.
If over the next year or two interest rates rise by a full two percentage points, the cost of repaying a A$1m mortgage will increase by nearly A$260 a week or over $13,000 a year.
The banks have been prudent in making loans to new homebuyers, ensuring they have capacity to manage some interest rate rises.
But the start of the rate hike cycle comes when households' budgets are already under pressure from rising prices for many goods and services, particularly non-discretionary spending such as petrol and food.
Adding to the pressure are the large number of "liar loans" out there. These are loans where the borrowers have fudged their loan applications – such as deliberately downplaying their expenditure – to get home financing.
Investment bank UBS released a survey last month looking at how rigorously banks assess borrowers and found 37 per cent of mortgages on Australian banks' books were misrepresented loans. The survey also found about 22 per cent of owner-occupiers had emergency funds to cover two months of repayment.
There are a lot of vulnerable mortgage holders out there who will struggle if rates rise much more, if they lose their job or their businesses decline.
It means even modest rate rises will likely have a chilling effect on the Australian economy, curbing household spending and slowing home renovations.
The RBA faces a very difficult balancing act in trying to tame inflation running at 5 per cent while ensuring its gradual increase rate hikes don't cause too much economic damage.
What next for AGL?
An investor wanting to drive change within a company has two distinct choices – divest or engage.
Many investment funds choose the former and, for instance, sell out of coal and oil companies. They argue their actions will eventually force companies, deprived of capital, to become more sustainable.
Others argue staying invested in a company is the best way to drive change because it allows them the opportunity to engage with management, take part in shareholder votes and, if their shareholding is large enough, take a board seat. And the bigger the shareholding, the more influence a shareholder can have.
Australian software billionaire Mike Cannon-Brookes is taking the latter approach.
He has just bought an 11 per cent stake in AGL Energy to force it to wind down its coal generation plants.
It's the second time he's tried to do this. In February he tried to buy the A$8 billion company to stop it splitting into two parts – an electricity retailer and a coal generator. The split would have shielded the retailer from the negative sentiment surrounding coal generation while allowing the coal generator to keep pumping out power and emissions for several decades.
With that takeover bid rejected by the board, Cannon-Brookes is trying a different approach. He'll use his stock to vote against the proposal when it comes up for a shareholder vote and will lobby other shareholders to do the same.
Cannon-Brookes' pitch to shareholders is that AGL will do better as one company and, if it split in two, the coal arm would struggle to attract the capital needed to transition out of fossil fuels, some time in the next couple of decades. Certainly it's hard to see investors putting cash into coal in the coming years.
The big question is what AGL will do if its plan is rejected. If Cannon-Brookes has any ideas beyond his latest move, he isn't sharing them.
Even so, some 75 per cent of shareholders need to approve the split, so with over 10 per cent of the vote already lost, AGL is up against it.
Only 15 per cent of shareholders need to agree with Cannon-Brookes and the merger will be off, leaving AGL to rethink its decarbonisation strategy.
For Cannon-Brookes, it looks like engagement is a lot more effective than just walking away.
