real mortgage rates are not going down...

Rikki

gingin wrote: »

Out of interest, how long were you paying at that rate?

It remained that rate for a about three years and gradually dropped to around 9% at the time I took my present mortgage out in 1992. I can't be exact as it was some time ago.:o

BettiePage wrote:

And how much was your mortgage and what % of your wage would it have been?

You could only borrow 2.5 times your wages at that time. Interest only mortgages with an endowment were the new thing, making mortgages more obtainable.

I wasn't so financially astute then ........ but if someone could work out what you'd pay each month for a £30000 mortgage at 13% I could roughly work it out.

PasturesNew

Rikki wrote: »

if someone could work out what you'd pay each month for a £30000 mortgage at 13% I could roughly work it out.

Well, a rule of thumb without getting technical is:

30000x.13/12 = £325/month interest only

To get technical: http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml

Which shows £30k over 25 years on a repayment would be £341/month
And actually interest only is £300/month if you do it formally.

PasturesNew

You can't make a direct comparison between now and then.

Most things you buy in life cost the same, or cheaper, these days. Back in those days we didn't have cheap food, cheap clothes, cheap gadgets, cheap holidays (not if you're single though, grrr), cheap stuff, like there is these days. The overall cost of living was a lot higher.

geoffky

when will people realise this.....interest rates where 15% then. but houses and mortagages were only £50.000 to £100.000 but now we have 5% and £250.000 to £300.000. so we are in the same position...so 15% isnt too bad then..

Rikki

PasturesNew wrote: »

Well, a rule of thumb without getting technical is:

30000x.13/12 = £325/month interest only

To get technical: http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml

Which shows £30k over 25 years on a repayment would be £341/month
And actually interest only is £300/month if you do it formally.

The figure of around £300 sound familiar.

The question asked by Bettiepage was "What percentage was my mortgage of my monthly wages?".

Based on £325 mortgage plus endowment of £48 a month. It was about 45% of my monthly take home wage. (£800-£900 a month net)

You'd have rates, water rates, telephone, gas and electricity. All supplied by the standard companies. :eek: No choice.

No sky, no mobile, no cable no temptations.

Rikki

geoffky wrote: »

when will people realise this.....interest rates where 15% then. but houses and mortagages were only £50.000 to £100.000 but now we have 5% and £250.000 to £300.000. so we are in the same position...so 15% isnt too bad then..

I know I would struggle of it went that high again. :eek:

geoffky

Rikki wrote: »

I know I would struggle of it went that high again. :eek:

but you are there now just the figures are different..

ValuableYouth

I'm 87 now. Back in the day, I paid £14 6s and 4 1/2d for a splendid Cornish cottage, complete with a boy. Had to use cash in those days. Fortunately had a bit left over from selling the coolies on the family plantation. Got thripence each for them at the time. Not thoroughbreds. Can tell by the rump, apparently. Still, easier to deal with than the Nigerians. Tried to get one working in the tobacco fields once. !!!!!! kept going on about being Royalty. Told me he had 14 guineas in sack under a tree. If I gave him £2 for a shovel and the voyage home, he'd be back with half of the loot for me. Had to have him shot in the end. Bad for morale in the fields. Made a lovely ashtray.

Generali

Real interest rates are (as an approximation) interest rate minus RPI which makes them about 0.75% right now. That's pretty low if you look at them historically. About 1-1.5% is considered normal. Above that is meant to slow the economy.

To take Rikki's point further, you still have to repay the capital so low interest rates aren't that helpful if you can't repay the principal sum borrowed. Whatever interest rates are you have to repay the principal unless you die (the mort part of mortgage means death) or sell up.

ValuableYouth

Ah yes....sold up last autumn. Bought a lovely donkey market in Ulan Battor. Global warming apparently. Mongolians don't want cars, just donkeys. All the smart money is in donkeys. Ahead of the curve.

Mortgages were for the French in my day. The English thought them unsporting.