6 ms·

Ah those poor boomers! Paying 15% interest on their £40,000 mortgage. These millennials don't know how easy they have it, paying 3% on their £200,000 mortgage.

by mc3 7y ago

turtlecloud 7y ago
the boomer can always refinance to the 3% - not sure what you are getting at here.
- aloknnikhil 7y ago
  The OP is being sarcastic.
  - mc3 7y ago
    Yes I am parodying the old avocado toast argument.
user5994461 7y ago
At 15% the boomer could fully pay and own the property within 5-10 years. Then save or go on to buy a new one. At 3% the millennial will still not be owning their property after 30 years.
- timthorn 7y ago
  Typical mortgage duration was and is ~25 years. The scenario in the 80s that gave homeowners relief was that the costs got inflated away (and MIRAS allowed the interest on a mortgage to be deducted from taxation)
  - hydraxis 7y ago
    I don't have this information for the UK, but for France parent is right. Mortgage duration for a typical income and a typical house in the 70s was 10 years, compared to 25 years today.
  - onion2k 7y ago
    Typical mortgage duration was and is ~25 years. The number of 35 year mortgages has risen from 2.7% in 2006 to 15.75% now - https://www.theguardian.com/money/2017/jul/29/goodbye-25-year-mortgage-borrowing-trap-35-year-deals https://www.theguardian.com/money/2017/jul/29/goodbye-25-yea... - and 40 year mortgages are becoming more common.
- d1r1g1bl3 7y ago
  In 1923, avg wage was £260, avg house was £350, a whopping 1.3 times avg wage. Only idiots would breed to support the establishment and continue to vote for their puppets. The UK is also on a different economic cycle to Eu, noted by the EU recession that unfolded after the Euro went live. People in Northen Ireland went south to take advantage of recession prices and vice versa. IMO the real reason for Brexit is the Good Friday agreement has failed, the gloss of Buy To Let has tarnished so some of the IRA are looking to get back to their old ways. Making Northern Ireland a gateway into Europe is similar to what the British did with Hong Kong being a gateway into communist China when it cut itself off to the world. Northern Ireland has if the current agreed Brexit deal goes through, so make NI a new Hong Kong which will force all parties to keep voting for it every 4years and keeps them all around the table something the GFA has failed at considering theres been no assembly at Stormount for a few years now. Thing is the political class don't want to give away the above info because then everyone will pile into NI property and make a packet, forcing out the ruling class who benefit from this insider knowledge. So do you vote for Brexit knowing what you know now or not?
- hoseja 7y ago
  Yes, that is the joke.
tomatocracy 7y ago
Rates going from 10% to 15% means an average monthly payment on a repayment mortgage with 15 years left to run would have increased by nearly 30% overnight (assuming mortgages at 2% above base rate). This was announced in the jaws of the early 90s recession. To put that in context - today the GBP bank rate is 0.75% and the average mortgage rate is probably c.1% above that. The base rate would have to rise to more than 5% to get the same size effect on the monthly cost of a repayment mortgage with c.15 years left to run.
jonplackett 7y ago
Problem was it divided people into the ones who could afford the hike in interest and the ones who couldn’t. Either you could keep up and were rewarded by a house going up in value massively, or you went bankrupt.
- aaronblohowiak 7y ago
  They didn’t have fixed rate debt?
  - mc3 7y ago
    In the UK typically people only fix for a short period, say 2 years, if at all. The premium for fixing for 25 years is quite high.
amiga_500 7y ago
And the wage inflation eroded the debt in a very short time. Far better than paying 50% of your wages now and for decades.

Ah those poor boomers! Paying 15% interest on their £40,000 mortgage. These millennials don't know how easy they have it, paying 3% on their £200,000 mortgage.

by mc3 7y ago

Ah those poor boomers! Paying 15% interest on their £40,000 mortgage. These millennials don't know how easy they have it, paying 3% on their £200,000 mortgage.

turtlecloud 7y ago

the boomer can always refinance to the 3% - not sure what you are getting at here.

aloknnikhil 7y ago
The OP is being sarcastic.
- mc3 7y ago
  Yes I am parodying the old avocado toast argument.

user5994461 7y ago

At 15% the boomer could fully pay and own the property within 5-10 years. Then save or go on to buy a new one. At 3% the millennial will still not be owning their property after 30 years.

timthorn 7y ago
Typical mortgage duration was and is ~25 years. The scenario in the 80s that gave homeowners relief was that the costs got inflated away (and MIRAS allowed the interest on a mortgage to be deducted from taxation)
- hydraxis 7y ago
  I don't have this information for the UK, but for France parent is right. Mortgage duration for a typical income and a typical house in the 70s was 10 years, compared to 25 years today.
- onion2k 7y ago
  Typical mortgage duration was and is ~25 years. The number of 35 year mortgages has risen from 2.7% in 2006 to 15.75% now - https://www.theguardian.com/money/2017/jul/29/goodbye-25-year-mortgage-borrowing-trap-35-year-deals https://www.theguardian.com/money/2017/jul/29/goodbye-25-yea... - and 40 year mortgages are becoming more common.
d1r1g1bl3 7y ago
In 1923, avg wage was £260, avg house was £350, a whopping 1.3 times avg wage. Only idiots would breed to support the establishment and continue to vote for their puppets. The UK is also on a different economic cycle to Eu, noted by the EU recession that unfolded after the Euro went live. People in Northen Ireland went south to take advantage of recession prices and vice versa. IMO the real reason for Brexit is the Good Friday agreement has failed, the gloss of Buy To Let has tarnished so some of the IRA are looking to get back to their old ways. Making Northern Ireland a gateway into Europe is similar to what the British did with Hong Kong being a gateway into communist China when it cut itself off to the world. Northern Ireland has if the current agreed Brexit deal goes through, so make NI a new Hong Kong which will force all parties to keep voting for it every 4years and keeps them all around the table something the GFA has failed at considering theres been no assembly at Stormount for a few years now. Thing is the political class don't want to give away the above info because then everyone will pile into NI property and make a packet, forcing out the ruling class who benefit from this insider knowledge. So do you vote for Brexit knowing what you know now or not?
hoseja 7y ago
Yes, that is the joke.

tomatocracy 7y ago

Rates going from 10% to 15% means an average monthly payment on a repayment mortgage with 15 years left to run would have increased by nearly 30% overnight (assuming mortgages at 2% above base rate). This was announced in the jaws of the early 90s recession. To put that in context - today the GBP bank rate is 0.75% and the average mortgage rate is probably c.1% above that. The base rate would have to rise to more than 5% to get the same size effect on the monthly cost of a repayment mortgage with c.15 years left to run.

jonplackett 7y ago

Problem was it divided people into the ones who could afford the hike in interest and the ones who couldn’t. Either you could keep up and were rewarded by a house going up in value massively, or you went bankrupt.

aaronblohowiak 7y ago
They didn’t have fixed rate debt?
- mc3 7y ago
  In the UK typically people only fix for a short period, say 2 years, if at all. The premium for fixing for 25 years is quite high.

amiga_500 7y ago

And the wage inflation eroded the debt in a very short time. Far better than paying 50% of your wages now and for decades.