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Comment by mariodiana | Hacker News Reader

The average rate since 1971 has been over 7 percent:

https://themortgagereports.com/61853/30-year-mortgage-rates-...

You need to look at the ratio of price to interest rate over time, not just interest rate.

I was shocked when I was talking with my grandma and she mentioned her mortgage when she bought her house was 18%. This was a couple years ago when I was looking and rates were around 4%. Blew me away.

true, but you also have to consider the price of housing in the '80s

You'll often see financial advice websites claim that one extra mortgage payment a year will reduce your loan term by 11-12 years on your 30 year mortgage. This was technically true for a brief period in the 1980s. Not sure why this ephemeral factoid made it's way on the the early web and survived as it became less and less true over the years, but I guess it dove tails nicely with the other nonsense about the "huge tax savings" from deducting your mortgage interest*

*Was still sort of true if you had a VERY expensive house.

My parents paid their house off after 7 years, but that is quite a lot easier to do with most of your payment is high interest rates and you have a much smaller principle to attack.

Right. People were greatly incentivized to pay off the loan as quickly as possible as well as make the largest down payment they could -- unlike today

Yeah, but back in the 80's etc. houses were nowhere near as expensive as they are now.

I have only one data point to go by, and that's from memory, but I'm not so sure about what you're saying.

The house I grew up in is a raised ranch ("high ranch") in a suburb within easy commuting distance to Manhattan (Rockland County, NY). My parents bought the house in 1969 for $40K, which seemed high to them at the time. Right now it probably fetches $450K easily, in this arguably inflated market. But I remember conversations from the last '80s where the house was thought to fetch $350-400K. The price dropped a bit after that period, and then went back up.

Maybe my memory is faulty. But I do remember a period in the "go-go" days of the waning Reagan Era where prices in that area were quite high.

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