Mortgage adviser, Alexander Hall looked at the average cost of a mortgage for homebuyers in the current market based on a 25-year mortgage term and an 80% loan to value on the current average house price and how the cost of climbing the ladder has increased versus this time last year.
The research shows that today, the average mortgage rate stands at 4.3%, up from 4.03% in January 2024.
The average cost of a home has also increased by 5.1% since January of last year, now standing at £292,059.
This means that, for the average homebuyer, a mortgage loan of £233,657 is required after placing a 20% deposit of £58,412.
With both the cost of a home and the average mortgage rate having climbed over the last year, it’s no surprise that the monthly cost of a mortgage has also increased.
Today, the average buyer making a full mortgage repayment can expect to pay £1,272 per month - an increase of 8.1% or £95 per month.
This means that over the course of a year, today’s homebuyers will be £1,142 worse off compared to those who purchased this time last year.
“A greater degree of stability returned to the property market in 2024 and we certainly saw a settling of the landscape with respect to the mortgage market," noted Stephanie Daley, Director of Partnerships at Alexander Hall.
However, she added, "Despite two reductions to the base rate, we haven’t seen mortgage rates follow suit and, in fact, the monthly cost of a mortgage today sits higher than it did this time last year.
"This is an important factor for homebuyers to be aware of, particularly now that many will be acting with haste in hopes of beating the stamp duty deadline which expires on the 1st of April this year.
"It’s always best to seek the advice of an expert mortgage advisor when looking to buy in any market conditions, as this will ensure you secure the very best mortgage available to you based on your financial position within the market.”
