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
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.
Mortgage rates were only that high in this country for a very short time. The only system was your mortgage lenderās 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.
Around the same time weād borrowed Ā£37.5k. We had two āyoung professionalsā incomes, so ā3+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 70ās 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.
None of that mortgage for women full stop
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 husbandās signature on the form
We spent 1988/9 in the US and since I was out of the UK for 366 nights I wasnāt 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 āNo, as his wife you are, legally, Graemeās 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 1990ās.
Now feeling glad we got the fixed deal we did. Fixed at 3.98 for 5 years.
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. Itās not been a great deal so far, although it has provided certainty at least.
when banks put a hold on selling mortgages you know somethings about to go very pete tong.
I think I saw suggestions of 1-1.25% base rate hikes from the Bank of England
weād be looking at increases of 4%+ to stabilise inflation after what these donuts have done
Iām 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, itās about trying to get people to spend money that they donāt have, to stimulate the economy.
How does raising the base rate help ?
Oh DUH, itās obviously enabling the banks to raise rates on credit to make massive profits.
Oh, silly me.
Isnāt 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 thatās what theyāve managed to achieve.
But this isnāt the Government, itās the Bank of Engerland.
Interest rate increases donāt solve the current situation.
The logic is contradictory.
How does that reduce inflation ? Isnāt it just feeding the banks ?
My point was that the government is trying to stimulate the economy, but the bank is not trying to stimulate the economy. It doesnāt 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 governmentās and the bankās policies seem to have been ignoring the international nature of much of this inflation. In the end the actions of UK institutions arenāt going to affect the rising world prices of energy or wheat much.