By Homebuyers are now paying the most expensive monthly mortgage repayments since 2010, but that today’s costs still remain a long way off historic highs.
Official figures released by the Bank of England this week show that the number of mortgage approvals in the UK has dropped in the past month.
And while this decline is reflective of the turbulent economic times facing the nation, it simply means approval rates have returned to their pre-pandemic level.
It could, therefore, be said that rather than hit a new low, approvals have returned to normal after a prolonged period of boom.
One reason for this drop in approvals is declining buyer demand which is being caused in part by rising mortgage costs.
Today, the average monthly repayment for a 3-year fixed-rate mortgage over 25 years at 75% LTV with a 25% deposit is £948.
This is £86 more expensive than last year’s average and the highest it has been since 2010 when the average payment – after being adjusted for inflation – was £972/month.
Today’s numbers, however, are still considerably lower than 2007’s high point when the global financial crash pushed the average monthly repayment up to £1,355.
It’s also important to note that this current hike in repayment costs is not an anomaly.
Instead, the average repayment has, with a couple of exceptions, been rising gradually since the 2012 low point of £771/month.
As for variable-rate mortgages, it’s a similar story. Today’s average monthly repayment of £1,135 is £49 higher than last year and the highest since 2008 when the average was £1,350.
Just like the recent history of fixed-rate mortgages, today’s variable-rate repayments have been on an upward trajectory, with the odd anomaly, since 2011’s low of £771/month.
Almas Uddin, Founding Director of Revolution Brokers, the mortgage experts responsible for conducting the market analysis, commented:
“This is undoubtedly a hard time for buyers, not least those on a variable rate mortgage.
However, we do still have something to be a little thankful for and that’s the fact that current economic turmoil has not pushed mortgage costs anywhere near to the crippling highs we saw as a result of the last global financial crash.
Furthermore, it is possible that we now have a more stable leadership in the UK which will calm some of the markets that have influenced this recent rise in mortgage costs and we have already seen mortgage rates start to reduce in recent weeks.”
| Table shows the average cost of a monthly fixed-rate mortgage repayment in the UK between 2002 and 2020 | |||||||
| Year | AveHP – UK | 3 year fixed rate at 75% LTV – average | Ave deposit at 25% | Ave initial mortgage loan | Loan term years | Full monthly repayment | Full monthly repayment inflation adjusted to Aug 2022 |
| 2002 | £112,520 | 5.35% | £28,130 | £84,390 | 25 | £511 | £845 |
| 2003 | £130,164 | 4.78% | £32,541 | £97,623 | 25 | £558 | £910 |
| 2004 | £145,609 | 5.51% | £36,402 | £109,207 | 25 | £671 | £1,080 |
| 2005 | £156,236 | 5.01% | £39,059 | £117,177 | 25 | £686 | £1,082 |
| 2006 | £168,513 | 5.17% | £42,128 | £126,385 | 25 | £751 | £1,157 |
| 2007 | £185,196 | 6.06% | £46,299 | £138,897 | 25 | £900 | £1,355 |
| 2008 | £176,853 | 5.84% | £44,213 | £132,640 | 25 | £841 | £1,222 |
| 2009 | £161,148 | 4.67% | £40,287 | £120,861 | 25 | £683 | £972 |
| 2010 | £170,365 | 4.45% | £42,591 | £127,773 | 25 | £706 | £972 |
| 2011 | £167,888 | 4.06% | £41,972 | £125,916 | 25 | £669 | £882 |
| 2012 | £168,556 | 3.92% | £42,139 | £126,417 | 25 | £662 | £849 |
| 2013 | £172,890 | 3.03% | £43,222 | £129,667 | 25 | £617 | £771 |
| 2014 | £186,770 | 2.96% | £46,692 | £140,077 | 25 | £661 | £814 |
| 2015 | £197,890 | 2.51% | £49,473 | £148,418 | 25 | £666 | £820 |
| 2016 | £211,725 | 2.02% | £52,931 | £158,794 | 25 | £675 | £826 |
| 2017 | £221,403 | 1.69% | £55,351 | £166,052 | 25 | £679 | £809 |
| 2018 | £228,354 | 1.80% | £57,089 | £171,266 | 25 | £709 | £824 |
| 2019 | £230,612 | 1.72% | £57,653 | £172,959 | 25 | £710 | £811 |
| 2020 | £237,218 | 1.75% | £59,304 | £177,913 | 25 | £733 | £830 |
| 2021 | £258,952 | 1.55% | £64,738 | £194,214 | 25 | £781 | £862 |
| 2022 | £280,462 | 2.54% | £70,115 | £210,346 | 25 | £948 | £948 |
| Table shows the average cost of a monthly variable-rate mortgage repayment in the UK between 2002 and 2020 | |||||||
| Year | AveHP – UK | Standard variable rate – average | Ave deposit at 25% | Ave initial mortgage loan | Loan term years | Full monthly repayment | Full monthly repayment inflation adjusted to Aug 2022 |
| 2002 | £112,520 | 5.66% | £28,130 | £84,390 | 25 | £526 | £869 |
| 2003 | £130,164 | 5.47% | £32,541 | £97,623 | 25 | £598 | £975 |
| 2004 | £145,609 | 6.15% | £36,402 | £109,207 | 25 | £713 | £1,147 |
| 2005 | £156,236 | 6.53% | £39,059 | £117,177 | 25 | £793 | £1,250 |
| 2006 | £168,513 | 6.51% | £42,128 | £126,385 | 25 | £854 | £1,316 |
| 2007 | £185,196 | 7.44% | £46,299 | £138,897 | 25 | £1,021 | £1,537 |
| 2008 | £176,853 | 6.90% | £44,213 | £132,640 | 25 | £929 | £1,350 |
| 2009 | £161,148 | 4.05% | £40,287 | £120,861 | 25 | £641 | £912 |
| 2010 | £170,365 | 3.96% | £42,591 | £127,773 | 25 | £672 | £925 |
| 2011 | £167,888 | 4.08% | £41,972 | £125,916 | 25 | £670 | £883 |
| 2012 | £168,556 | 4.22% | £42,139 | £126,417 | 25 | £683 | £876 |
| 2013 | £172,890 | 4.37% | £43,222 | £129,667 | 25 | £711 | £889 |
| 2014 | £186,770 | 4.45% | £46,692 | £140,077 | 25 | £775 | £955 |
| 2015 | £197,890 | 4.51% | £49,473 | £148,418 | 25 | £826 | £1,017 |
| 2016 | £211,725 | 4.44% | £52,931 | £158,794 | 25 | £877 | £1,073 |
| 2017 | £221,403 | 4.38% | £55,351 | £166,052 | 25 | £911 | £1,085 |
| 2018 | £228,354 | 4.26% | £57,089 | £171,266 | 25 | £928 | £1,079 |
| 2019 | £230,612 | 4.31% | £57,653 | £172,959 | 25 | £942 | £1,076 |
| 2020 | £237,218 | 3.79% | £59,304 | £177,913 | 25 | £918 | £1,040 |
| 2021 | £258,952 | 3.61% | £64,738 | £194,214 | 25 | £984 | £1,086 |
| 2022 | £280,462 | 4.21% | £70,115 | £210,346 | 25 | £1,135 | £1,135 |
Mortgage rate data sourced from Building Societies Associations
Average UK houseprice data sourced from The Land Registry
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