Even after adjusting for inflation, the average homebuyers are paying 39% more per month in mortgage repayments compared with five years ago, according to analysis by Octane Capital.
The analysis was based on the average mortgage rate and an 80% loan-to-value (LTV).
Between 2018 and 2023, monthly mortgage payments increased from £1,008 per month to £1,404, compared to an increase of just 4.3% from 2013 to 2018, from £966 to £1,008.
Between 2013 and 2018, typical mortgage rates fell from 3.79% to 2.34%, while house prices rose from an average £234,000 to £286,000.
The challenge for buyers in 2018 was finding a bigger deposit, as typical 20% deposits rose from £46,800 in 2013 to £57,200.
Since 2018, however, house prices only rose by 1%, to around £287,500 in 2023.
As of September 2023, average mortgage rates rose to 5.44%.
Jonathan Samuels, CEO of Octane Capital, said: “The cost of repaying a mortgage is considerably higher in today’s market than it was just five years ago and much of the increase seen over the last decade has come since 2018.
“This pain has arguably been prolonged by the Bank of England who have been cautious, to say the least, in their attempts to manage inflation.Â
“The current climate is likely to block the aspirations of many who want to own their own home although there has been signs of positivity this week, as some lenders have reduced their fixed rate offering to below the five per cent threshold.Â
“However, it’s extremely likely we will see the Bank of England increase the base rate yet again this week and so it’s unclear as to how long this period of increased mortgage affordability will last.”
