First-time Buyers

Monthly mortgage costs up £200 for first-time buyers

Christina Hoghton
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Christina Hoghton

Despite the rise in repayments, mortgage rates are now settling, according to new research

New first-time buyers will pay an extra £200 more a month compared to last year, said Rightmove.

The property portal found that those buying their first home with a typical 15% deposit now pay £1,056 per month compared with £865 last year, due to higher mortgage rates and a new record asking price of £224,963.

But the property portal added that this is significantly lower than the average of £1,218 per month in October (when mortgage rates sky-rocketed following the mini-Budget).

The average rate for a five-year fixed, 85% loan-to-value (LTV) mortgage is now 4.44%, down from 5.89% in October, though up from 2.76% last year.

Homemover mortgage costs settle

Average monthly mortgage payments for all homemovers are steadying as mortgage rates settle, said Rightmove.

Someone purchasing an average property with a 15% deposit would now pay £1,720 a month, compared to £2,012 per month in October and £1,799 per month in January.

Rightmove’s mortgage expert Matt Smith said: “The combination of a new record price and higher mortgage rates than last year means it is challenge for first-time buyers.

“Our data indicates that first-time buyers who are able to raise their deposit are still finding buying compelling, with the number of people looking to move in this sector currently higher than the last more normal market of 2019.

“Now that rates are settling, would-be buyers planning a move may need to assess their individual circumstances and weigh up their affordability based on current rates, with the potential cost of waiting or paying rent for longer.”