What would you do if Interest Rates were 18%

tirano

The central bank of crisis-hit Iceland kept its key interest rate unchanged on Thursday at a record 18%

Would you be able to cope with that, £1500 monthly interest on a £100,000 mortgage !!

IveSeenTheLight

tirano wrote: »

The central bank of crisis-hit Iceland kept its key interest rate unchanged on Thursday at a record 18%

Would you be able to cope with that, £1500 monthly interest on a £100,000 mortgage !!

I'd be fixing my mortgage long before it was at 18% and putting all my money into savings

Kez100

Well I have paid 14% on this mortgage before. Now the repayments have started to kick in it will be less than whatever we paid per month at that time.

I presently am overpaying at the equivilent of 20.33% interest, so I wouldn't be happy I was no longer overpaying but it would be affordable. However, what would the economy be like generally if rates were 18% would be the key for me. I suspect my business would really suffer so I may not have the income to support it anymore.

ray123

I knew their was a reason that I dont shop in Iceland!

agent_orange_2

I remember paying about 14% on our first mortgage back in 81, but back in those days our mortgage was for £18000, which was about a multiple of 3 X our wages at the time. I think we were paying £230 a month, seemed a lot at the time.

rozeepozee

I'd be very pleased to have my offset mortgage with the same amount in savings offset against the amount.

mrcow

Our mortgage would be £2085 at 18%.

Would we pay it? Well we'd have to. Luckily we've not overstretched ourselves. I think it's important for everyone to overpay right now though whilst rates are low. It's not going to be like this forever.

ceebeeby

Woah! That's scary. Realistically, we'd struggle for about 6 months and then have to downsize to be honest!

We're not overpaying at the moment (using the savings from mortgage and council tax fee months to do some much needed jobs around the house). However, if the rate stays low for a while then will definitely be moving into that zone.

I seriously had never even considered that!

Cat695

if that happened the country would be ruined.......simpley because wages won't reflect that rate (how many young/single people earn 1500 a month).....rents would rocket to cover the cost of BTL mortgages (which would probably be 1/2% higher).....i dread to think on the number on repo's and homeless numbers would sky rocket as there are fewer council houses now than when it happened back in the 80's

no one could afford to save (less the rich and mortgage free) as all spare cash would be paying mortgage or rent

very few people COULD sell (who would want a mortgage with a repayment of 1500 a month on a little flat?) house prices would plummet faster than a fast thing

people with no mortgages would be the only ones to really be safe

I think you would find there would be rioting on the streets

Pobby

Think how us poor beggers coped when interest rates went through the roof in the last down turn.

domcastro

I'd get repossessed!