I wouldn’t have a mortgage if I owed only 25,000. But I’ll play along, what % of gross income would you say someone would be spending on a mortgage for 3x rise in interest to not be a concern?
If I remember the numbers from when I applied for my home I think it was a maximum of 65% take home salary for all debts/expenditures and of that only 45% maximum could be considered the mortgage. So ran some math on an online mortgage calculator based upon $100k annual gross salary, 40% taxes paid and max 45% mortgage payment per month.
Bank was pushing to lend me the maximum 45% rate which on rough math today makes it out for me at $2,250 maximum mortgage payment per month. So ran some math on an online mortgage calculator based upon $100k annual gross salary, 40% taxes paid and max 45% mortgage payment per month. That's the number the bank says....but it sure as heck isn't a nice way to live. I went for a mortgage closer to 35% or $1400.
To use your example of trippling the mortgage...or in my case to move from the $1400/month (@ 3%) to a 9% interest rate...it puts me right at the theoretical maximum allowed at $2170. That would really hurt and frankly I couldn't do it with taxes, heating and food also all much higher.
So to answer your question...and running some numbers I had to have over 75% equity in the home before the interest rate difference resulted in less than a car payment increase in finances.
Or to put in another way less than 18% of monthly cash flow in has to be on the mortgage...that's a fairly small segment of people with mortgages