@itsallwrong
Before all this recent madness started (i.e. pre y2k) there were some rules of thumb that people followed when assessing how affordable a mortgage was.
Some "rules", such as the 3.5 * first earner + 1.5 * second earner's gross salary rule were predicated on traditional IRL mortgage interest rates being in the ~8% range (with a little offset to reflect how couples leveled their tax credits pre mccreevy's equalization)
But the core principle has been that the mortgage payments should not be more than 1/3rd-ish of your take home pay...
Each bank has their own version of 1/3rd-ish, e.g. 33%, 34%, 35% etc.
When stress-testing for affordability, the bank adds 2 or 3% to the interest rate, and then redoes the payments calculation. If the payments at current rate +2 or 3% are greater than their version of 1/3rd... then they deem that you cannot afford the mortgage.
Some people argue that it is total loan repayments that should not be above the 1/3rd-ish... some times they up the cut-off to 40%.
In any case, each bank decides its own criteria when making their offer. Oh and their calculations are likely more complex than the rough-cut calculation.
We don't know what basis the guestimate of 10,000 was made, but here is another way to guess:
between 2000 and 2007 there were approx 75,000 new homes built per year.
That gives about 600,000 new homes during the bubble.
Let's suppose 1/6th of those never actually completed the purchase as a result of the crash... that gives about 500,000 new homes.
Let's assume that house-hold trading up will consume a new home, as there will be a chain if you are trading up and that chain eventually consumes a new home (excluding death of owner)
So that gives us 500,000 mortgages initially assessed based on very low ECB rates.
There is approx 1/5th of those in 3 months or more arrears by the current stats. And I remember seeing a stat somewhere that said there are approx 700,000 mortgages in the state.
So we now have all the people in arrears evidence that their mortgage is unsustainable, and we need to add the people who are just eeking by from the remaining total of 400,000...
I am frankly not seeing where you'd get 10,000 as the total of unsustainable mortgages from that back of the envelope...