The monthly cost of a new mortgage rose by 61% in the year to December 2022 for the average semi-detached house in the UK, according to the Office for National Statistics.

The ONS said the average mortgage rate offered by lenders for a five-year fixed rate loan at a 75% loan-to-value ratio was 5.05% in December 2022, according to the Bank of England.

This would have resulted in a monthly mortgage repayment of £1,262 if you were purchasing a semi-detached property in the UK at the average December 2022 price of £286,000, with a mortgage term of 25 years.

This is a £481 (61%) increase in the monthly repayment compared with the corresponding monthly repayment estimate in December 2021. The average equivalent mortgage rate on offer then was 1.59% and the average UK semi-detached property price was £258,000 in December 2021.

The monthly mortgage repayment on an average detached UK property bought in December 2022 would have resulted in a monthly mortgage repayment of £2,041 (up by 60.7% on December 2021).

For terraced houses, monthly costs would have been £1,063 (up by 59.6%). For flats and maisonettes, it would have been £1,028 (up by 54.6%).

Affordability stretched

In December 2021, a loan-to-value rate of 75% and a budget of £1,000 per month would have enabled you to afford an average semi-detached property in nearly two-thirds of local authorities in Great Britain, said the ONS.

With the same budget in December 2022, however, you would be able to afford the average semi-detached property in less than a third (30.1%) of areas.

In London, the average price of a terraced house was £594,000 in December 2022, more than double the £258,000 average price of a terraced house in the Welsh capital.

Based on a 75% loan-to-value rate on a five-year fixed mortgage over 25 years, a terraced property in London would have cost £2,616 per month, an increase of £930 (55%) on the equivalent figures from December 2021.

The lowest mortgage repayment cost for a semi-detached property on the same terms was in County Durham at £576 per month in December 2022. This would have cost £470 per month, on average, in December 2021.

Sarah Coles, Personal Finance Analyst, Hargreaves Lansdown, said: “This lays bare the shocking cost of a new mortgage around the country. For new buyers armed with a reasonable deposit, the options are increasingly limited.

“Unless you can find some extra cash up-front, you may well end up having to scale back your ambitions.

“For remortgagers with a decent chunk of equity in the property, the additional costs may be manageable, but those with large loans and little equity have worryingly few options.”