Hi Sierra
Yes you are right about variable rates in the late 70s. My bad. I should have clarified that at the time that 50% of my RE holdings were leveraged through 90 day commercial bonds. A very cheap finance instrument in the beginning - (again, can't recall the starting rate, but much cheaper than mortgage rates of the mid-70s). Nevertheless, by the height of the late 70s crash commercial bond rates had risen to circa 20%, plus 2% procuration fee on rollover (22%). A large proportion of the RE investment community used these and other similar finance instruments in those days, which added substantial weight to the overall crash of the time. Politically driven, as I recall.
My apologies for the error, but given it was almost 40 years ago I had blanked out the details and differentials between the RE investment side and home owner rates. Even so, the effect on the RE market was a catastrophe for both segments of the market.
Regardless of my error consider the possibility of IRs rising to 10% with the leverage of todays mortgages. A blood bath by any other name...
Again, my apology for the confusion.
