On 19/6/20 4:57 am, Commander Kinsey wrote:
On Mon, 15 Jun 2020 00:17:50 +0100, Xeno wrote:

On 15/6/20 8:52 am, Clare Snyder wrote:

snipped

It was an
advantage for the folks selling our house when we bought - it had a
transferable mortgage at 6 1/4% when the going rate was 20-22%.

Wow!* When was it that high?* I thought mortgages had always been
3-6%.
* Early 80s they peaked at about 24%

Only about 18% here for home mortgages. Business mortgages were higher.

How on earth could that work?* At under 5% people can only just afford
to get one.

That may be the case in the UK. I started with a mortgage of 13%. Not
long after I took it on, the interest rate went to, in my case, 17.5%.
Heady times indeed.

We still had a mortgage on the house we moved out of too, but the
equity
in house#1 allowed us to pretty much pay cash to the existing
mortgage. We payed off that mortgage before buying a gallon of paint
to do any redecorating.

So you bought a house worth less than your old one?!

No, we sold a $50,000 house to buy a $67000 house. What equity we had

We paid $67,000 for our first house with a loan of $56,000, sold it for
$300,000 about 18 years later. Paid $365,000 for for the next and
borrowed a mere $75,000 to get into that one. Sold it for $600,000 nine
years later. Because we did a sea/tree change, this house cost less than
we sold our previous for.

Double the price in 9 years is some profit.* Mine has almost doubled in
20 years.* Sid you deliberately buy something you thought would be worth
more later?* And I've no idea what sea/tree means.

Nope. I bought in order to *get into the market*. With house prices
rising that much over a relatively short period of time, people found
themselves in a position where even being able to save up the *deposit*
was difficult. Set a target and it's moved out of reach by the time you
achieve it. As an example. The house I sold 7 years ago for $600k,
located a mere 16 kilometres from the heart of Melbourne, doubled in
price over the next *5* years. That's insane price rises in anyone's book.
Around here, people have a sea change if they move/retire from the city
to a seaside town. People have a tree change if they move/retire to a
rural town. I did both in the same move. I now live in a small rural
seaside city where where we are surrounded by farms but the nearest
beach is 5 kilometres distant. In other words, it's a rural centre and a
beachside holiday resort.

in the old house plus the existing transferable mortgate on the new
house amounted to about $3000 less than the purchace price of the new
house - and we had $3000 cash available in cashable investments. It
took us a few years to pay off the existing mortgage, by which time
the value of the house had already climbed by over 50%. 38 years later
it is worth almost 10 times what we paid for it.




--

Xeno


Nothing astonishes Noddy so much as common sense and plain dealing.
(with apologies to Ralph Waldo Emerson)