Enjoy the low rates while you can but, when it comes to mortgages, you should always prepare for the unexpected
- Credit: PA
Our elder son, when two years old, once tried to feed our mortgage money to the cows.
It was in the olden days when husband was paid in real money in a little brown envelope.
The toddler had found the cash and was busy shoving it through the hedge at the bottom of the garden when I spotted him.
Have you ever tried wresting £20 notes from the slobbering jaws of a cow? I don't recommend it.
Especially as all the other cows in the field gathered round to see what was going on.
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Because I had to de-slobber the notes and count them to make sure that none was ending up as an extravagant cow pat, I remember clearly that our mortgage was £240 a month.
We were in the process of moving as I was expecting a second baby. After careful budgeting our new mortgage was £340 a month. A bit of a squeeze but affordable.
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Only then rates went up. Within a couple of months our mortgage payments had almost doubled to £600. Help. The rate was, I think around 15pc. It was a huge proportion of our income. We ate a lot of lentils that winter.
Now of course that we've paid off our mortgage and finally have some savings, the interest rates are zilch. Sometimes not even that good, which seems cruelly unfair. But I'm not bitter, she says through gritted teeth.
At least back in the 80s we knew we lived in volatile times. Rates were up and down, though mostly up, every few months. We knew rates could go up – though not necessarily so far so fast – and made some effort, however feeble, to prepare for it.
Last week the bank rate went down to 0.25pc. For the last seven years it's been 0.5pc. Today's borrowers are living in cloud cuckoo land.
It might be hard to get on the housing ladder, but once you're on, you've been living in unnatural times.
Interest rates have been low for a long time. Now they're the lowest they've ever been. This can't last forever.
Anyone who's taken out a mortgage since 2008 has been lulled into taking such low rates for granted.
But this is not normal. This is not the real world. One day, even if not for a few years, it will change again. Rates will go up.
And it will come as a tremendous shock to a great many people.
Enjoy the low rates while you can. But remember, when it comes to mortgages, you should always prepare for the unpleasantly unexpected – including slobbery cows.