Homebuyers are facing an 8.1% increase in average mortgage costs year-on-year, according to research by Alexander Hall.
Despite a reduction in interest rates at the end of last year, the average monthly cost of a mortgage has risen.
Alexander Hall assessed the average mortgage cost for homebuyers based on a 25-year mortgage term and an 80% loan-to-value (LTV) on the current average house price.
The average mortgage rate now stands at 4.3%, up from 4.03% in January 2024.
Additionally, the average home price has increased by 5.1% since January of last year, now at £292,059.
The average homebuyer now requires a mortgage loan of £233,657 after placing a 20% deposit of £58,412.
As both home costs and mortgage rates have climbed, the monthly cost of a mortgage also increased.
A typical buyer can now expect to pay £1,272 per month, an increase of £95, or 8.1%.
This translates to being £1,142 worse off over the year compared to last year’s buyers.
Stephanie Daley, director of partnerships at Alexander Hall, said: “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.
“However, 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.
Daley added: “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 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.”
