Does anyone remember when mortgage rates were almost 17%!

I remember it only too well. Hard times indeed.

16.67% was the highest we went to with Abbey National. Dreaded opening every envelope from them. Awful time but somehow we survived.

Absolutely remember it. It was crippling. No doubt every generation thinks life was harder back when, but we really did struggle and had no luxuries at all. It was amazing what you could make out of a bag of horse carrots and a sack of potatoes just to make ends meet.

We lived abroad for two years when we first married and then OH did a Masters so we didn’t buy our first house until 1979. I can’t remember the interest rates but we were both working and I don’t remember finding it a squeeze. Fast forward to 1981 and I gave up work to have our first baby. The interest rates had shot up to 15% and it was all a bit difficult! Maternity pay was quite good back then so it was a year or so before we realised how little we had to live on. Fortunately OH started getting short stints of overseas work so things improved. I registered as a Child Minder after our third and I did a typing job one day a week when youngest went to Playgroup. We had made the decision that I wouldn’t return to work properly until youngest was 5 and at school, and we kept to that.

We bought our first house at the end of 1965, after renting for the first 2 years we were married, paying £1 a week rent. Our house cost £2,150, we paid £100 deposit, and the mortgage was just over £12 a month. I wasn`t working at the time, we had a baby and a toddler, hubby brought home about £10 a week, a little bit more with overtime.

But it all worked out in the end- brilliant neighbours took us under their wing and our child 1 before baby was born- and we sold on very quickly 10 years later, for a good price.

Oh I remember. We had just moved towns and as I was about to have second baby, no family or support around- and the house we had bought (we thought) was taken off market at last minute- we bought 'above our means' as it was the only house we could move into almost straight away. Could barely afford repayments, and then this happened. Our endowment went up to 19.5%. I had massive panic attacks.

We were incredibly lucky in that DH worked for a high street bank and, although the financial situation had to be totally transparent, we had a bank mortgage. This was very, very rare, except for bank employees. We only paid 5% interest rate which meant we had a much bigger house than mere mortals! It was very helpful as I didn’t work ,had three children in 5 years of marriage!
But I have to say that each time we sold, when we were moved, we honoured the buyer’s offer. No gazumping from us.

Yes remember paying 14.75% that included 1% because the loan to value was high. Mortgage was for about £30k . In those days you got Miras tax relief on first £30k . We bought for £44k and sold for £88k a few years later, the perks of buying when the markets were crazy going up!

Buying houses is classic supply and demand. the prices rise until the number and prices of houses on the market match the number of people who can afford to buy them.

17% interest was in ‘75 but inflation was 25% so even at that rate if you could afford the repayments you could buy. In ‘90 interest peaked a 14%, inflation was lower at 10% which was not encouraging if you were a first time buyer.
Buying your first house when you were young was never easy, it’s probably harder now the demand for houses seems so much higher now.

growstuff

This wasn’t the 70’s - it was the late 80’s early 90’s. Surprised you can’t remember.

Yes I do, it was late 80’s early 90’s

From my experience it is not the cost of a mortgage that is prohibitive but the amount of the deposit you need to get on that ladder
The cost of renting is high and often the monthly mortgage payment on your own home would be less or favourably comparable
Our first home cost us in mortgage payments the equivalent of a weeks salary My daughter and son in laws is probably a similar amount or actually a bit less and they having a mind blowing mortgage of around 260k but that is covered by a bit less than a weeks salary
My son rents at the moment at around 750 a month which is probably quite a bit less than one weeks earning for him but as a seperated dad he has two households to support

You’re right in one sense growstuff but surely to compare you would need to look at the other differentials as well, eg what percentage of income was spent on food then compared with mow, which then paints a different picture.

I don't understand the point of this thread. Property prices have risen at a faster rate then average incomes since the 1970s. People now pay a higher percentage of their income on housing.

Same as many others, we bought our first house in December 1978 and the interest rate was 9.75%, by the time we moved in February 1979 the rate was 15.5%.
We bought our present house in 1983 on a low cost endowment deal and made which turned out to be a good deal as we paid a premium of £12,500 over twenty years and it paid out about £37,000 and we had paid off our mortgage by then.

Oh yes I remember our first flat was in London in 1970 and cost £12,000. The repayments were killing as we were both on low salaries at the time.
We did get tax relief on the interest in those days though.

We had a 25year mortgage in the 70s - I think the house was about £9,000. When the interest rates rocketed the building society gave us the option of increasing the time to 40 years so our monthly payment stayed the same. Just as well as we only had DH's wage to live on.

Yes, remember the very high mortgage rates very well ( if only we had savings at that time!)
Bought our first house in 1969, and after that it only went one way...up.
Now we have no mortgage and a bit of savings which haven’t earned anything in interest for donkeys years.

I remember the mortgage hikes in the 1980s, we moved in 1988 due to my husbands job when I was a stay at home mum with three children under school age. When we bought the house we could afford the mortgage reasonably comfortably but in the few weeks between agreeing to buy and actually making the first payment, the mortgage rate almost doubled!

We relied on food parcels from my parents and clothes for the children were donated by my mother in law who volunteered in a charity shop. It was amazing how I could feed my family on a pack of bacon, an onion, two potatoes and a bit of grated cheese!

I did a weekly paper round with my children in their pushchair and hand addressed envelopes for a double glazing company just to get a few extra pounds. Fortunately we managed to keep the house and eventually things got easier as my husband got a pay rise and the interest rates fell but I’ve never forgotten how tough it was.

I think it affected the way I look money now, I made sure I lived below my means when I went back to work and after my divorce so I could build up some savings as a buffer.

My children managed to buy their first houses in 2019, both paid rent but lived in cheap flats and did without holidays while they saved. Both bought on their own, without partners, and bought low value houses but I’m very proud of their determination to get on the housing ladder. I did offer to help them out with some money for initial expenses but they both refused my help! I know they have well paid jobs but it still needed determination on their part to save enough money for the deposit.

I remember in the mid 70’s paying a deposit and opting for an interest only mortgage. It took us over a year to stop paying interest on the interest.

I worked in a building society at the time, so had a small discount on our mortgage - but still struggled. ?

Don’t know how I managed to keep a smile on my face when all the savers came in twice a year to have their massive interest payments added to their savings!

yup we already had a fixed interest mortgage and were so pleased.

My daughter and son are buying their first place together. In the southeast a 2 bed flat is costing them 265k. There is no way they could buy separately. Fortunately they get on, don’t have partners and are very good savers. They’ve managed to save 50k as a deposit whilst living at home and paying a low rent. Not an option to all young people.