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Can someone talk to me about mortgage interest rates please????...

(5 Posts)
Becaroooo Mon 11-Jul-11 13:29:06

...to settle an argument I am currently having with someone?

So, for example, if you have a £500 mortgage on a 5% rate, how much would your repayments go up to if the rates went up to 19% like they did in the late 80s-early 90s??

Many thanks!

CogitoErgoSometimes Mon 11-Jul-11 13:40:21

It would depend on how long the mortgage is taken over. Using this calculator

£85000 borrowed over 25 years @ 5% = monthly payments circa £500

£85000 borrowed over 25 years @ 19% = monthly payments circa £1400

Average base lending rates over the last 10 years have been around 5.5%. The highest base rate was in October 1989-1990 when it peaked at 15% but steadily reduced after that point. September 1992 when there was the ERM crisis, rates briefly touched 15% but then dropped back to 12%

Becaroooo Mon 11-Jul-11 13:48:09

Aha!

So. If you had £145k borrowed over 25 years at @ 5% the repayments would be ??
Same @ 15% would be??

Thanks cog This is very helpful!

CogitoErgoSometimes Mon 11-Jul-11 14:05:42

The moneysupermarket.com calculator says....

@ 5%.. £145k is monthly payments of £850 give or take
@15%... increases to £1860

Becaroooo Mon 11-Jul-11 14:37:08

Ha!

I have won the argument...thanks cog

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