Don't panic
Most HIBOR mortgages have a prime minus cap so you shouldn't be caught out too badly.
Also, governments around the world are trying hard to alleviate the effects of the credit crisis which means they'll probably be less concerned about inflation than they are about the general state of the economy, so we'll probably see plunging interest rates over the next few months.
I agree that we're in or heading towards a significant downturn but I can also remember people like NR saying in an update 3 months after SARS that at one stage he thought the company might go under and during the Asian Financial Crisis people saying that it would bring the rest of the world with it, so I think it's a bit far fetched to suggest that the end of the world is nigh!
If you're looking at a 1-2 year timeline this might not be the best time to buy, but I think that sometime over the next 10 years you'll see the price paid today reappear, be it 2011, 2013 or 2018.