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Does anyone remember when mortgage rates were almost 17%!

(135 Posts)
Kandinsky Tue 26-Oct-21 07:52:34

I do because I was paying it.

Bought our 1st house in 1988, can’t remember the rate at the time but probably around 10%? ( which seemed ok at the time )
Then the rate started going up literally every few months until it reached 17%.
I don’t know how we survived but we did.
3 young children as well.
I really hope the rates don’t go anywhere near those rates as my dd has a 200k mortgage! ( ours was 40k back in the 80’s but still nearly finished us )

LtEve Tue 26-Oct-21 08:01:14

I do! We bought our first house in 1990, from memory I think there was one week when interest rates went up twice. Income tax was much higher too and the threshold at which you started paying it was lower. Fortunately I was bought up to be frugal.

seacliff Tue 26-Oct-21 08:07:20

Oh yes indeed. It forced me to go back to work earlier than planned, after having our children. Childcare was a nightmare,as we had no family close. Very hard times for us.

Juliet27 Tue 26-Oct-21 08:08:36

What a wonderful time that must have been for those with savings!!

Marydoll Tue 26-Oct-21 08:13:33

I do! We had three children and I was a stay at home mum.

The worst was in 1979, when we moved down to Troon to be nearer my husband's job. I was pregnant with my first child, we had bought a new build and I was very unwell. .

Our house purchase price was £17,00. When we went to complete, it rose to £18,950 and the mortgage went up three times that month to 15%. We could barely afford to eat. We ate an awful lot of eggs!! 😁

Georgesgran Tue 26-Oct-21 08:14:30

Sadly Juliet most of us had no money left to save, despite DH and I both working 2 jobs. 😄 My situation now is that I’m happier to have low returns on my savings to keep the mortgage rate low for my children.

Juliet27 Tue 26-Oct-21 08:24:06

I do agree Gg.

Nannytopsy Tue 26-Oct-21 08:25:26

Same here! We paid £10,500 for a little house in Wales when we married but had to sell when the rate got up to 17.5%

Mollygo Tue 26-Oct-21 08:31:35

I do. No family closer than 150 miles and two young children. DH walked to work instead of getting the bus and I had just over £6 for food per week. I remember a lot of eggs, porridge, carrots and cabbage featuring on the menu.

M0nica Tue 26-Oct-21 08:35:09

.....and young people today complain about baby boomers and the value of their houses!. Think how house prices would fall if interest rates went up to over 10% now!

We bought our first house in 1969. Interest rates were just under 7%. By the time we completed interst rates were over 7% and never dropped below that start figure until about 2000, just as we finally paid it off. During that time, as so many have said, rates went up to 15-17% and down again.

Those high rates sent me back to work. I had planned to come back, but I took a job I had avoided for several years because the pay rates were so poor (before the minimum wage), but we needed the money. We had a Christmas when the children's presents were home made or came from charity shops. They considered it one of their best Christmases ever!

JenniferEccles Tue 26-Oct-21 08:36:19

It seems incredible now doesn’t it? Our children would be horrified at having to pay 7% let alone 17%

I thought the same as you Juliet27

Our age group paid mortgages at that eye wateringly high level and now we have savings we get virtually nothing!

I also remember how quickly property prices shot up in the late 70s. We bought our first house, a 3 bedroom mid terrace house on a new development and within months the next phase had shot up in price.

Grandmabatty Tue 26-Oct-21 08:37:47

I remember it well! We had just moved into what we thought was our forever home. We had stretched ourselves to buy it and every month thereafter it seemed a letter came from the building society indicating yet another rise in interest rate. I really don't know how we managed.

Calendargirl Tue 26-Oct-21 08:44:03

We bought our first home in 1981, had lived in a tied cottage until then. I had just gone back to work part time as both children were then school age.

I worked 12 hours a week, the mortgage took all of my salary, think it was 14-15%. We owed £13,500.

We managed, DH did lots of overtime, but no fancy holidays, eating out, two cars etc which seems the norm for many nowadays.

Sparklefizz Tue 26-Oct-21 08:45:19

Indeed. Remember it well. We bought our first house, a tiny new build box, and were gazumped £500. We couldn't borrow any more so we sold the car! Interest rates were going up and up. It was terrifying. We had nothing left to cut back on, but somehow we struggled on.

ElderlyPerson Tue 26-Oct-21 08:49:28

Yes, interest rates were high, but a house cost about three times a man's (I know, I know, but that was how it was back then) salary, whereas now ordinary three-bedroom houses in the countryside are going for well over £200,000 and ordinary wages are often well under £25,000 a year.

So I wonder who are buying these houses, where do they get the money?

multicolourswapshop Tue 26-Oct-21 08:49:34

Yes I remember we bought our modest house for £8,000 in 1981 thankfully the mortgage is all paid up now and it’s worth much much more I think it’s worth over £130000 at present and going up every day. What does that tell you? I used to say to my old friend if he’d stayed married to the one wife he’d have his mortgage all paid up by now. Don’t think he was amused but it was true.🤣🤣🤣

Katie59 Tue 26-Oct-21 08:50:58

In those days you had to be brave, whatever you bought it cost more the next week because inflation was 25%, those of us that “bit the bullet” never regretted it. Housing cost both rented and owned was much more affordable then, mortgages seems very achievable if both were working.

ElderlyPerson Tue 26-Oct-21 08:58:02

If I remember correctly house prices rose rapidly when a wife's earnings started to be taken into account for mortgage loans, up until then "the wife" (sic) was deemed to be going to have children, stop working and therefore her earnings could not be relied upon to pay towards the mortgage loan and so could not possibly be considered. smile

Marydoll Tue 26-Oct-21 08:59:23

ElderlyPerson lovely to see you posting. I hope you are well.

Pittcity Tue 26-Oct-21 09:00:11

Yes I do. We had an interest only mortgage as it was what we could afford according to the equation used to calculate how much we could borrow. We ended up with an insurance policy worth less than we owed but had made many times more that on the increase in the price of the house.
We were definitely in a better position than those starting out today as 17% of a little is still less than 2% of a lot!

Marydoll Tue 26-Oct-21 09:04:32

Pittcity, the same thing happened to us. The final settlement on the policy wasn't enough to cover paying off the mortgage. Fortunately, we became aware of this and had been saving. It was really worrying at the time.

kittylester Tue 26-Oct-21 09:09:54

We had just bought a new house too - DH insisted on buying one costing £20k rather than the safer £14k. Terrifying.

Party4 Tue 26-Oct-21 09:11:12

Married in 1973, delay in new house build so didnt move in till 1974.Never paid the quoted mortgage as it increased twice before completion.I then became pregnant (unplanned--)We literally lived hand to mouth.Then local councils started messing with çouncil tax/water rates seperating the bills with huge increases.We had no spare money,second hand furniture,no freezer and old banger of a car.Nurserys hadn't arrived then even struggled with cost of playschool session. We knew no one with the luxury of a gym membership, regular hair and nail treatments and very few had 2 cars.Yes different era,less expectations but young and happy with job lot.

Gossamerbeynon1945 Tue 26-Oct-21 09:26:49

I do, thought we'd have to sell the house!

rosie1959 Tue 26-Oct-21 09:27:03

I was having a bit of a clear out and found the property details of our first house brought just before we married it was £14,500
I remember mortgage rates were around 15% my parents advised us to do all our budgeting on my husbands wages only as when children came along mine could not be relied upon.
We had some new stuff as wedding presents and brought a bed out of a catalogue but most was hand me downs or second hand. Childcare was not common then and amongst our friends nobody even thought of renting.
During the next few years many of our friends brought plots of land and built their own houses The plots were far bigger and would now be used for several houses