What buying a house during the 14% base rate peak taught me

The mortgage rate was just over 16 per cent. Everyone thought she was mad. 

The property market was starting to crash; she was a single mother on a four-figure, part-time annual wage, and the child maintenance was sporadic at best, non-existent at worst. 

I didn't think much of it at the time; I was caught up in the excitement in finally being able to have my own room at 12 years old, rather than sharing my mum's any more. All my friends had their own rooms. 

But I remember vividly what it took for her to get on the property ladder, and I remember that she was forced into it, basically. 

Of more value than the estimate today on her two-bed terraced home is the lesson I learned in saving and borrowing.

In a 'previous life', she had worked for The Prudential, and as an ex-staffer she was allowed to remain renting a small flat above a shop almost in perpetuity. Except the 1990s property crash was just around the corner, and the Pru wanted to clean up its book of residential properties. 

It gave us notice in the late 1980s - '89, I think - that it intended to sell the properties to a developer. This gave my mother no choice but to see what was on the market, and what was near enough to my school. 

"We need to get on the housing ladder", she said to me, as she reached under the old DIY white wardrobe for her meagre savings. 

Just a few hundred pounds, which she had put together from whatever alimony she was getting sent over or from the sale of her jewellery and little treasures.

I had no idea what a housing ladder was. I honestly thought it was those fire escapes from West Side Story, and I said something to that effect.

"You buy a house when you can, and over time, most house prices will go up", she explained.

"But they're going down - the news said so."

"And that is why we need to buy now. I will never be able to afford it otherwise."

"But the news said mortgage borrowing is too expensive." (She encouraged me to watch the BBC news at 6pm every night).

She handed me the envelope - I'd never seen £20 notes before. It must have been about £400 or so.

"But the same rates that make mortgages expensive mean interest rates also are high on savings. So we put this in the Abbey into a savings account, and then it will grow by itself thanks to interest rate rises."

I wasn't great at maths, but I got the concept of money growing. She took out a few notes. "This is our tithe - this will go to the poor and to the Children's Society. The rest goes to the Abbey."

And down we went to the Abbey, while my mother put her life savings into the building society. 

Forget the posh coffees - I never had breakfast growing up.

I don't quite know how she did it but I do know it required a lot of sacrifice. Forget the posh coffees - I never had breakfast growing up - not til I went to university.

I don't remember mum buying any clothes for herself. The two of us did all our own DIY, including laying carpets. We rented a TV from Radio Rentals. 

When people talk about 'saving, saving, saving' and then buying a house for themselves with either help from their parents, or the benefit of living rent-free in their parents' homes, they might be heroes for the tabloids, but they aren't getting any applause from me.

Mum had no external help, and yet managed to buy a property as prices declined to a national average of about £50,000 while mortgage rates were at their highest. 

The house had no hot running water, no central heating, no insulation and a hole in the roof exactly the size of a damn wood pigeon. The windows had been left to rot since 1944 and it smelled of damp.

But it was hers.

As base rates dropped, and mortgage rates followed suit, so, too, house prices rose. 

True, it took nearly 20 years for the both of us to get the house up to the standard that today's Gen Z generation seem to expect from a property. 

But of more value than the estimate today on her two-bed terraced home is the lessons I learned about saving and borrowing from my mother. 

• Buy things that are good value when the prices are low, and be patient.
• Save as much as you can, as often as you can.
• Give 10 per cent of all you have to people in need.
• Let interest rates work for you, rather than inflation working against you, when it comes to cash savings. 
• Don't get into a mortgage or big loan you can't afford.
• Be prepared for some hard graft. The best things in life often require the most work.

And that's the story of how, at 12 years old, I learned about interest rates.

Maybe every 12 year old should learn a similar lesson - but preferably in the school curriculum, not the way I had to learn it.

Simoney Kyriakou is senior editor of FTAdviser