Mortgage rates of yesteryear.

I do. Was it under Thatcher?

Our first mortgage was 15% - all of my salary!

I remember it well. We had moved about a year before and at the time were deciding whether to go for the 3 bed semi we bought or the detached version.

We decided against the detached because we were worried that if the interest rate went above a certain percentage we would struggle. Thank goodness we did because it was still a struggle but not as bad as it could have been.

I do. Pre children, we were both working at the time. One salary paid the mortgage, the other was used for food and all other needs.

I suppose this is working up to 'people don't know they were born these days and we had it really hard an we survived' ?

Well, stop it.

We knew what the interest rates were going to be when we took those mortgages on; current generation of mortgage holders had no idea that rates were going to increase sharply and rapidly.

Our mortgage offers were based on a smaller ratio of income to sum lent. And for a long time the only salary taken into account was the husband's. It was a struggle for many of us but at least we had a bit of leeway.

We weren't a generation brought up in the expectation of always getting cheap and easy credit. You might have a judgement (adverse, of course) to make on that, but like it or not, that's what subsequent generations are used to and work with.

Everything is quite different now.

'The past is a foreign country' MaizieD?
Just because people have greater expectations now does not make financial prudence a bad thing. Yes our mortgage rate was 15% so we know and well remember how hard it was thus we can know how younger people feel today.
Desperate unemployment back then at a rate unimaginable today. My OH was made redundant several times due to the economic situation. That feeling of the ground shifting below our feet as yet again his job had gone was appalling. So don't tell me to 'stop it'!

Everything is different for this generation however, when taking out a mortgage there are lots of events that should be taken into consideration.

People lose their jobs sometimes through no fault of their own, illness, separation along with the arrival of children and going down to one income all alter circumstances and effect the household income.

When taking out a mortgage any respectable IFA/mortgage provider should inform that the cost of borrowing can go up as well as down.

I remember going to France for several weeks in the summer and when we returned our mortgage rate had gone up to something in excess of 15%, God knows how we afforded that given we had a fairly large mortgage at the time, but somehow we did.

When I bought my first house with my ex he was working for an American bank and we got the discounted staff rate of 3%, that was back in the late 70s and I think we borrowed almost 100% of the purchase price, we were the envy of all our friends, can't remember what interest rate they were on, but it was considerably more. The people we were buying from thought we were too young to be buying a 3 bedroom house, like it was any of their business and became a bit sniffy with us because we were still in our twenties, "so a flat surely at your age" or something along those lines

When we first started paying a mortgage it was around 7%. I was aware it could rise but not to 15% and even marginally higher.

The vast majority of us were earning a pittance then so life was difficult. I was earning around £112 a month, not exactly a fortune! I do not recollect "ever having it so good". It was a hard slog.

That was unnecessary MaizieD.

When we took out our mortgage I believe it was 10.5% - 0.25% below the national average, so we thought we were lucky! I remember it going up to 15%.

We knew the interest rates were high and applied accordingly for a mortgage. The problem now is that young people have committed to buying their homes at a lower interest rate which they could afford at the time and now it's becoming unaffordable. Renting isn't the answer because the private rental sector is also unaffordable.

Exactly Charleygirl. It goes without saying that interest rates may rise. We knew that but as you say it was never imagined they'd go up to 15%.

And how many remember in the 80s that you could buy a family home in a decent part of London for £50,000?

Today's mortgagees have it far harder, IMO.

Lost my post. I looked it up and the mortgage rate went up from 9% to 15.4% between February and October 1990 under Margaret Thatcher, who was then replaced by John Major. Shortly afterwards, Halifax became the first bank/building society to offer fixed rate long-term mortgages. Surprisingly the sale of council houses rocketed during this period with the take up from 50% to 65%.

Yes I remember the 15%. Thank goodness my salary wasn’t included in our house purchase. It was a struggle.

It’s true mortgage rates were much more volatile 40 yrs ago any thought of them being as low as 5% was fanciful, we all mostly cut our cloth according to our means. I’m sure most will do that today even if they have to take a repayment “holiday” to get through.

House prices ARE affordable or they would not sell as fast as they have been, it’s the cost of rented property that is far too high, the government needs to take urgent action to provide more at a sensible cost.

Yes, I remember 15%. I was given an opportunity to buy a tiny cottage next door to a farm and I took it. The mortgage rate was 6% when I bought it and I thought I could manage. I went from being a penniless student to a penniless first time home owner in the space of about a year. I was young, I was healthy, I got by, even if I was reduced to searching through coat pockets and down the sofa cushions to find enough money to buy some food!

We certainly did not know MaisieD that our mortgage rate would increase suddenly by almost 10% at the halfway mark in 1990.

I do not appreciate being told to ‘stop it’ either. Stop what exactly?

I had two children to fund through university at that time and it made meeting ends very difficult even with two good wages.

Quokka

We certainly did not know MaisieD that our mortgage rate would increase suddenly by almost 10% at the halfway mark in 1990.

I do not appreciate being told to ‘stop it’ either. Stop what exactly?

I had two children to fund through university at that time and it made meeting ends very difficult even with two good wages.

I was just about to type exactly this! We had no idea that we'd suddenly have to start paying a large increase in out mortgage in the 90s. We had 2 young children. My poor husband ended up working 7 days a week goodness knows how many hours a day. Quite the disaster at the time.

Branded in my memory is the figure of 16.67 courtesy Messrs Abbey National. My final and only available cutback was the cancellation of two weekly news items those being the local rag and the radio times. Ah yesss....I remember it well and oh so painfully.......

We moved towns and region when I was very pregnant with our second. As I had had an emergency section for 1st one (transversal breech- after a very long labour) and no family- we had to find somewhere fast, and OH had already moved to digs to start new job. Couldn't find anything in our budget, so ending up going quite a bit over so we could settle before baby arrived and sort out child care for toddler. And found we had moved next to the best neighbour ever, who took us all under her wing- and looked after toddler, and then baby, when we needed it. Pheeew.

Scary time, and then it got more than scary, as rate went up to 19.5% (we had to have a special mortgage due to OH's pre-exisiting conditions, so we could be protected in case).

It all ended well as we sold it fast and well a few years later, bought the next one at preferential rates. But is was truly hairy for a time!

Kim19

Branded in my memory is the figure of 16.67 courtesy Messrs Abbey National. My final and only available cutback was the cancellation of two weekly news items those being the local rag and the radio times. Ah yesss....I remember it well and oh so painfully.......

It was definitely painful, forever etched in my memory.

We bought our first house in 1981, five years before DH left the Army and the interest rate was 14%. He was getting a good salary so it wasn’t too bad, but I took a job to make sure we had some latitude because DS got a two year placement in College and we knew that by the time DH left the Army DD would be going to Uni. We had only just come back to England from abroad. I suppose we were fortunate that we could pay down a chunk of the mortgage from his service gratuity which lowered our payments somewhat and we switched to an endowment mortgage which eventually paid off the rest (before endowments then became a liability!). I was talking a few weeks ago to DD about mortgage rates and asked her if she could guess what ours was when we bought that house. When I told her she was amazed. She’d no idea that it had been so high then.

But what was the price of the house in relation to salary? The house we bought as young teachers would be unaffordable to teachers today, they tend to be bought by bankers, barristers and city lawyers.

The monthly repayment was a full weeks wages.
1970 with a baby and 2 year old.
I didn’t work until both children were at school.
Never any money left at the end of the week.
Nothing on credit.