In our world of inflation, the Federal Raise has consistently been raising interest rates these last 2-3 years. This is great when you've got money sitting in a savings account, but terrible if you're ever needing to borrow money, whether you're looking to obtain a mortgage, a car loan, etc.
Right now, interest rates are flirting with 8% for mortgages here in the US, which makes purchasing a home a pretty steep proposition. It's the highest we've seen in decades, but it certainly doesn't compare to the crazy economic time period we had in the 1980s.
Anyway, how has today's interest rates impacted your life? Are you holding off on buying a home? Or a car?
I got my first mortgage in the 80's. It was a 100% mortgage at around 5.5%. Within months it was up to 16%. To add to that misery the property we bought turned out to be riddled with dry rot which was missed by the surveyor we engaged. The surveyor's insurers refused to compensate us and I didn't have the money to sue. It took me the best part of 25 years working my backside off and living close to poverty to recover from that.
The current interest rates are similar to what they were when I took out my first mortgage which to be honest are nothing in comparison with what I ended up paying. What I have done is spent the last 10-15 years buying, restoring and reselling vintage guitars and investing those earnings in the stock market. Nvidia in particular has been very good to me. For the first time in my life I can buy whatever I want. The only issue is I don't really want anything 🙄
We bought our first home in 1990 and the rate was 10%. We refinanced a couple years later because the rates had dropped by 2 points, and that's the key to save some money, watch to see if they drop and hop on it. It has to be about 2 points though to make it worth your while.
