Well my god the Bank of England have raised interest rates to a massive 5%!!!!
I bet you are all gnashing your teeth over this huge amount.
Now it makes me laugh because when I took the mortgage out on my flat back in 1986 I started off paying 11%! I bet that would get a few people windy. I remember the day Norman Lamont went mad and interest rates hit 15%.
I remember the day when the Investment Bank I worked for gave us a package when they'd pay us anything above 8%. I was in heaven as I was promoted that day.
In all the years I had a mortgage I never paid less than 7%. My father in all the year he had a mortgage never paid less than about 9%.
I do wonder what would happen if we ever had a return to high inflation and high interest rates.
Of course nowadays you can stick your money in a savings account and get 5% which for a basic rate tax payer is a 4% return given inflation is "officially 2.5% you are getting a real return on your money. In the past we got high rates BUT we never got more than inflation.
So folks don't panic 5% is nothing. It can get much much worse.
"It can get much much worse."
ReplyDeleteThat's what worries me! I was stuck on a higher rate for 5 years even when the rate sank, just because they scared me with the idea it might rise to 15% again.
I always seem to hold the wrong policy at the wrong time.
Gnash.
Oh god, I just know what tomorrow will bring.....
ReplyDeleteYes, I remember it well. Our first mortgage payment was in the days when it was 8.5% then of course it all rose again and again.
ReplyDeleteOf course savings were also relevant to interest rates but you never got the same as for borrowing!