Mortgages - reminiscing about the good old days, and other old people crap

Our first mortgage in the 80s was close to 15%

Put us off borrowing big for all the years we had a mortgage, had it not been for that we would be a lot better off now we are approaching retirement

There was also the negative equity issue in the late 80s with a lot of repossesions so I expect that also put a lot of people off borrowing the max

Told the broker to do the 5 year fixed for both.

Now to worry about the energy bills. Probably solar thingies next.

1 Like

Mortgage rates were only that high in this country for a very short time. The only system was your mortgage lenderā€™s standard variable rate. So that went really high for a while, but dropped back down to about 10% soon enough.

It was much worse in the USA, where mortgages were usually fixed for 25 years, and people were locked into the high rates.

I remember in the mid eighties having a Ā£25K mortgage and paying Ā£600 a month.

1 Like

Around the same time weā€™d borrowed Ā£37.5k. We had two ā€˜young professionalsā€™ incomes, so ā€˜3+1ā€™ would have covered that. One income paid the mortgage. The other one paid for literally everything else.

Was certainly the case for my parents and mates parents that in the 70ā€™s when they started popping out sprogs the wife gave up work and stayed at home to look after the midgets.

None of that dual income malarky back then.

1 Like

None of that mortgage for women full stop

2 Likes

It seems shocking now, but I remember in the early 70s my sister wanted to buy a small item on HP and she had to get her husbandā€™s signature on the form :pleading_face:

1 Like

We spent 1988/9 in the US and since I was out of the UK for 366 nights I wasnā€™t liable for UK income tax. Mrs VB (who earned rather more than I did) had to work her notice so was only out of the country for 9 months. In the 3 working months she burned through her 0% allowance and so was expecting to be liable for some tax.

The accountant said ā€œNo, as his wife you are, legally, Graemeā€™s chattel. That means your income is his income, so you can apply his allowance as well as your own to your (his) incomeā€. I think that was only done away with in the 1990ā€™s.

3 Likes

Now feeling glad we got the fixed deal we did. Fixed at 3.98 for 5 years.

3 Likes

Finally my 10 year fix at 2.5% is looking like a good plan. I took it a few years ago when I thought brexit might fuck the economy. Itā€™s not been a great deal so far, although it has provided certainty at least.

2 Likes

when banks put a hold on selling mortgages you know somethings about to go very pete tong.

1 Like

I think I saw suggestions of 1-1.25% base rate hikes from the Bank of England

weā€™d be looking at increases of 4%+ to stabilise inflation after what these donuts have done

Iā€™m not understanding why the Bank of Engerland is raising interest rates.
AFAIA, Rates are normally raised when there is a run on savings, or when the Government is trying to reduce the amount of saving to stimulate the economy.
The current issue is not about hording money, itā€™s about trying to get people to spend money that they donā€™t have, to stimulate the economy.
How does raising the base rate help ?

Oh DUH, itā€™s obviously enabling the banks to raise rates on credit to make massive profits.
Oh, silly me.

2 Likes

Isnā€™t that what the government is trying to do ?

The bank is trying to control inflation, and persuading people to save rather than spend helps with that, as does impoverishing them by making their mortgages more expensive. More recently the bank may be trying to support the pound and raising rates helps with that too.

It takes a brave, or stupid, government to arrange for the bank and the treasury to be acting almost in opposition to one another. But loads of commentators are claiming that thatā€™s what theyā€™ve managed to achieve.

But this isnā€™t the Government, itā€™s the Bank of Engerland.
Interest rate increases donā€™t solve the current situation.
The logic is contradictory.

How does that reduce inflation ? Isnā€™t it just feeding the banks ?

1 Like

My point was that the government is trying to stimulate the economy, but the bank is not trying to stimulate the economy. It doesnā€™t care about growth. It cares only about inflation.

Making people poor reduces inflation by reducing demand. Prices can only rise if there are customers out there who can afford to pay the higher prices.

I accept that all of this is short-circuited if there are richer people in other countries who can step in and buy the vendorsā€™ (now expensive) goods, but many of the governmentā€™s and the bankā€™s policies seem to have been ignoring the international nature of much of this inflation. In the end the actions of UK institutions arenā€™t going to affect the rising world prices of energy or wheat much.