The average house price* in 1989 stood at £55,000, today it has leapt to £260,000. Retail Price Index (RPI), the only inflationary measurement of the day, was 8.3% compared to 3.3% now and Bank of England base rate stood at 14%.

In June 1989 the best fixed rate mortgage was a three-year fixed at 12.40% from National Westminster Bank, but you could pay as much as 12.99% from National Home Loans Corp.

Sylvia Waycot, Editor at Moneyfacts.co.uk, said:

“If you wanted a fixed rate mortgage from your bank or building society in July 1989 you had a choice of just seven products, mainly three-year deals.

“At the time early redemption charges could be quite high which made some borrowers wary of longer ties-in.

“It was at a time when mortgage jargon, including words such as capped, capped and collared and tie-ins, was used more regularly.

“Today, there are 2,181 fixed rate mortgages to choose from, easily outnumbering the 769 variable and trackers by almost three to one.

“Two-year fixed is the area where the lowest rates reside, and the cheapest available comes from West Brom BS at 1.58%.

“As we enter a time of uncertainty with regard to rate rises, stress tests to assess affordability and bank of England loan-to-income multiples, fixed rate mortgages that offer a certainty of monthly payments, are likely to become the white knight of the mortgage industry. However, the questions of ‘how long’ and ‘when should I fix’ are unlikely to go away.”

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.

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