According to Office for National Statistics (ONS) data, the average monthly cost of a new mortgage rose by 61% in 2022, compared to 2021, for the average semi-detached house.
ONS data indicates that the average mortgage rate offered by lenders for a 5-year fixed-rate loan at a 75% loan-to-value ratio was 5.05% in December 2022.
Based on this, if a person was purchasing a semi-detached property in the UK at the average December 2022 price of £286,000, with a mortgage term of 25 years, they would be required to make a monthly mortgage repayment of £1,262.
This is a significant increase of £481 (61%) compared to the corresponding monthly repayment estimate in December 2021.
The report also highlights that increased mortgage rates have pushed monthly repayments higher, resulting in significant variations in monthly mortgage repayments at the local level within the UK.
In December 2021, there were 119 local authorities where the average mortgage repayment would have been under £1,000 per month for a detached property at the average price for that area, with a 25% deposit, a mortgage term of 25 years and an average mortgage rate of 1.59%.
Previous Office for National Statistics (ONS) analysis, in our How increases in housing costs impact households article, found that more than 1.4 million households in the UK are facing the prospect of interest rate increases when they renew their fixed rate mortgages in 2023.
