> you have to pay interest and principal every interval So this is another red flag. An individual has to repay principle -- e.g. repay a loan. But a sector of

> you have to pay interest and principal every interval So this is another red flag. An individual has to repay principle -- e.g. repay a loan. But a sector of the economy does not repay a loan. A sector of the economy, in aggregate just rolls over loans as new home buyers take out new loans while home sellers retire old loans, for households as a whole, it does not make sense to talk of the total debt level as being "repaid". It would be a silly anthropomorphism to ask "When will the household sector finally pay down its mortgage debt?" The only way that would happen is if households stopped buying houses. So let's not apply anthropomorphisms to an analysis of sectoral debt to GDP ratios. If you have statistic that a percentage of actual households have too high debt service costs versus historical data, let's hear that argument instead of Z.1 ratios. When we are talking about sectors of the economy, all that matters is whether the interest costs are too burdensome. An increase in the interest rate might make interest payments more uncomfortable and cause the sector to reduce its debt to a more appropriate level. That is rational, right? Then so is increasing the debt level when rates fall.