Unfortunately, he IS comparing to 1.5 and it is that drastic!!
Worst still, the default rate is up for C4 to E5. For example under 1.5, E2 interest rate is 27.49% and annual chance of default is 3.73%. Under 1.6, E1 interest is now 22.49%, a drop of 5% while the annual default has gone up to 5.56%.
So we are being hit both ways! RAR will definitely drop. But with Reserve bank interest rate approaching zero, it is rather expected.
Regards
CB