Where I live in Scandinavia and across Europe, interest rates are very low.
More and more people are using the rising value of their home to draw out money. I would almost call it "free" money when the interest rate is near 2%.
Case in point: I just saved over 2 years the money to renovate my kitchen.
In contrast, my neighbour borrowed 30,000 euro against his house (whose value keeps going up) to renovate his bathroom. He borrowed another 70,000 euro for a new car. He telephoned the bank and easily got the money.
When we talked about it, his point was that he got the new bathroom 2 years earlier than if he had saved up the money. He doesn't seem concerned about pushing out the end date of his mortgage or possibly never owning 100% equity in his home.
Perhaps I'm overlooking something. I can't see any economic benefit to borrowing against their houses to buy new Teslas, bathrooms, kitchens and sailboats. Mostly "toys" and "luxuries", if you will - all financed by the national central bank.
I wonder, where does all this money come from? His bank gets loans from the national central bank but where do they get the money from? Can central banks just "make up" loans from nothing?