Hi all,
With the recent talk on the inevitibility of interest rate rises some time in the next 12 months, it reminded me of 1990-91 when my mortagage got to 18%.With each rise my bank sent me a letter offering to extend the time span of the loan to keep our repayments managable.
Well, we didn’t take up the offer, we just kept paying the extra payments, which got to 50% of our then income. It really, really hurt us, but when rates did finally come down we didn’t owe any extra on the loan. Meanwhile, people with cash invested reaped an 18% return.
So when rates begin to rise again to theoreticly slow down the investors it also catches every body else.It hurts those least able to afford it and least to blame for the overheated market.IE. first home buyers/low income families.I don’t have a solution but, this is a debate this country needs to have.
JoffI think fix the interest rate, say 5 yrs is the way to go.
Kind regards
Chandara
[Keep going, you’re nearly reach the end of financial freedom]
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