Rate cuts tempting for now but trend will reverse Kera and Paul Zaltsberg at their home in southeast Melbourne. A RASH of buyers tempted into the housing market by the bottoming of interest rates will become a new generation of struggling mortgagees when the cycle inevitably trends upwards. National Australia Bank chief economist Alan Oster sounded the warning for when official rates rebound in the next two to three years to more traditional levels from the historic low of 2.5 per cent set this week by the Reserve Bank. Banks and lenders moved swiftly to cut home loan rates to between 5 and 6 per cent on the back of the 25-basis-point reduction by the RBA on Tuesday. Mr Oster said delinquencies on mortgages could rise in three to four years as home loan rates return to the norm of between 6.5 per cent and 7.5 per cent. However, he hosed down concerns about a house-price bubble, saying growth in values would be tempered by rising unemployment. The Commonwealth Bank said prices remained below previous highs in many markets and conditions were far from frothy. Mr Oster said that NAB didn't see interest rates rising again until 2015, but he cautioned against borrowers getting "silly" due to low rates. "People need to consider the stability of their employment over the next three to four years before taking out a new mortgage," Mr Oster said. The subprime mortgage collapse in the US was triggered by increasing interest rates, he noted. In Melbourne's southeastern suburb of Bentleigh, Paul and Kera Zaltsberg, 36 and 32, purchased a home for $523,000 in 2009. The couple have a variable mortgage of about $1800 a month and have always made their payments at low, post-global financial crisis rates. Mr Zaltsberg, who runs a small business, said that an inevitable rise in interest rates would put the couple under pressure. "If they go up to more normal rates then you have to make an adjustment," he said.