to want to literally throttle people saying "5% is nothing, interest rates used to be 13%" etc etc

[XCTX]

Yes, yes they did. But there is NO context here and also no comparison

interest rates were 13% at a time when the average house price was 60k and cost 4.5x the average salary.

The average house price is now 284k or so, and is c.7.6x the average salary.

People are coming off fixes and suddenly seeing their mortgages increase by 40, 50% and it is infuriating me that some are minimising this problem by comparing one finite moment in time with no context.

It's usually morons who are sitting pretty in a paid-off house and are enjoying how much house prices have risen.

DH and I were just talking about this two minutes ago. It’s infuriating.

Yanbu at all

Yep! And on top of that the weird narrative that people who are most stretched by their mortgage repayments already are feckless and greedy, buying a bigger/nicer property than they can afford - rather than young and buying the only property they can afford!

It's also pretty poor to accept that - the point of society is not to go backwards! We shouldn't be happy with this just cos people in the eighties managed to get by. Anyway, a lot didn't!

It's not a helpful thing to say, I agree.

I guess they are just trying to put things in perspective, and saying that 5% really isn't that bad and you'll survive because you have to.

And people WILL manage. Experience shows that people will cut back on EVERYTHING they possibly can before they stop paying their mortgage.

The only bills you have to pay are mortgage, council tax (because you can go to prison for not paying it) and food. Ultimately you can survive without anything else.

I'm not a mortgage adviser but I work in a firm whose bread and butter is mortgage advice.

I'm sick of hearing it.

My Dad said the same yesterday to me. I asked him what multiplication of my parents salary was this rate on. He answered 1.5 his. Then I explained most people are borrowing up to 5 x joint salary now he then finally got it. There are no options for the second person to pick up some hours and cover the deficit because they're already working to pay the bills as they were (for the majority).

I think the important point here is that there is precedent.

It is correct that 10% then is not equal to 5% x 2. But when someone says something like in the OP the answer is something like…

Yes, and 13% then is equivalent to 6% not w so we are already there in terms of hardship. But imagine it goes to 13% in current terms. That could happen and would be catastrophic.

Yabu for people pointing out that recently rates have been very low

I hear you. And of course you're right.

However I'm sick of people dismissing those who lived through the 15% interest rate era. It was shit. Really shit. Terrifying.

We couldn't afford a car, phone or video player. I sometimes had to walk 5 miles to work because I didn't have bus fare.

We were trapped in negative equity. Had no choice but to find the money or have our homes repossessed and still owe the money.

I'm not denying it's terrifying for many now. And if I were a young person I'd be feeling hopeless.

But don't take it out on boomers or those who had mortgages through the 80s/90s. Most of us have huge empathy and would do anything we could to make things easier for the next generations.

YANBU.

It's like people who say that life was so much harder in the 30s/40s/50s/1783 which it might have been and no one is disputing that but I wasn't alive in 1952 so it's fucking irrelevant. I'm alive now and dealing with problems that exist now.

Great post. And I think its awful that we're headed back to those days.

100% this. My MIL loves to remind us how they nearly got repossesed in the 80s when the rates went up but they got through. Their mortgage was £300pm on their starter home. Ours was £900. The rates are incomparable.

YANBU

See also: the 'I grew up in a house that had ice on the insides of the window and it was fine' brigade.

Yes! it gives me the rage.

Also, when interest rates went so high very many people lost their homes and thousands more were trapped in negative equity.

People were literally handing their keys back to the bank.

So it's not like interest rates were high and everything was fine. There were on average 67500 repossessions in the years 1991-1993 and they were around 50000 in the years before and after that. For context, there were 4580 in 2019.

I must admit, I thought the affordability rules that were introduced would mean that an increase to a historic average wouldn't result in mass panic/repossessions.

Interest rates on mortgages are now 10% - this lady in the BBC-question time audience had her mortgage offer withdrawn and the new offers are all at 10%

twitter.com/bbcquestiontime/status/1575573759565635587?s=20&t=GvrpnxaolhYkTa9pXeMbAg

TBF the average weekly wage in 1982 was £154 and in 2022 it's £601, so in real terms £900 is less than £300 was then. Their payment was c. 50% of the average income. Yours was only 37%

It's still annoying, but times really were hard in the 80s and early 90s.

The only bills you have to pay are mortgage, council tax (because you can go to prison for not paying it) and food. Ultimately you can survive without anything else.

But to pay said mortgage and council tax and food, you need a job and therefore pay for transport and childcare and in many cases WIFI (and therefore electricity) as a minimum. Once you paid mortgage, council tax, food, transport, internet, WIFI and childcare there is nothing left so anyway for most people I know.

YANBU.

What really matters is the impact the rise has on household finances.

A jump from 10% to 15% is only a 50% increase, a jump from 2% - 5% is 150%. The proportionate increase is far higher.

When you factor in the greater proportion of household income going on mortgages compared to the 80s because of increased multiples offered by lenders, the impact is a lot greater.

The thing that does make a difference is that for people on fixed rates, the impact won't be immediate. Fixed rates weren't really a thing* until the latter part of the '80s so most people were on variable rates and the hit was immediate.

*I had a colleague who was mocked for taking out a mortgage with the Greater London Council at 8% fixed when the variable was about 6%. They weren't laughing at her 2 years later!

Gives me the absolute rage.

It's never said in the spirit of one of the posts above, as an expression of solidarity and understanding. It's always 'you don't know you're born.'

I doubt their childcare bills were £38k per annum to start with.

I would never say that 5% is nothing, but I was certainly aware that interest rates had generally been low for some time and how high they were in the 1990s and before, mainly as my parents did nearly lose the house, twice. When we got our second mortgage also we had a fixed rate of 5.7% for five years so a mortgage rate of 5% or 6% didn't seem unthinkable - that was about 15 years ago. I also know we are in a better position than most having a lot of equity in the house and not being mortgaged to the hilt, so I'd know better not to be smug about it.

It tends to be people Who have to have one up, suffer worse, feel superior. It always baffles me why anybody’s response to ‘I’m struggling’ would be ‘well other people have struggled worse.’ I mean fair enough if you don’t wanna hear it, but that doesn’t mean you can’t just say ‘that sounds difficult, I’m sorry to hear that.’

Looking directly at you mother.