Average first-time buyer mortgage payment nearly £100 less than last year

Ahead of the Bank of England’s interest rate decision at 12:00pm today, new analysis shows that the typical first-time buyer monthly mortgage payment is £93 less than at this time last year.

The average first-time buyer mortgage payment is currently £909 per month, versus £1,002 per month last year, the latest Rightmove figures show.

The analysis is based on the typical first-time buyer property sector of two-bedrooms or fewer homes, and a deposit size of 20%, with mortgage costs spread over 30 years.

Mortgage rates have been slowly trending downwards this year. The average two-year fixed mortgage rate for someone with a 20% deposit has lowered from 5.21% at this time last year, to 4.38% now.

Over the same period, the average five-year fixed rate has lowered from 4.91% to 4.52%. 

As mortgage rates have come down, average first-time buyer property prices have remained flat and average wages have increased – combining to slowly improve buyer affordability.

The average asking price for a typical first-time buyer property in Great Britain is now £227,466, while the latest snapshot of average earnings suggests wages have increased by 5% compared to last year. The average asking price for a first-time buyer type property was £227,924 at this time last year.

In London, the most expensive location to get onto the ladder, a first-time buyer could be looking at a saving of £240 per month on a mortgage compared with this time last year. The average asking price for a typical first-time buyer type home in the capital is £497,295.

For those looking for city life without the capital’s price tag, Aberdeen, Hull & Carlisle are currently the lowest priced cities for first-time buyers to get onto the ladder.

After London, St. Albans & Cambridge are currently the highest priced cities for first-time buyers.

Colleen Babcock, Rightmove’s property expert, commented: “Affordability is still playing a key role in market activity right now. The factors which contribute to buyer affordability are improving, and if we see further Bank Rate reductions this year followed by mortgage rate drops, this could spur more buyers on during the second half of this year.”