First-time buyer monthly mortgage repayments £150 lower than peak
We keep a close eye on the mortgage rates lenders offer to borrowers – including when they change, and what this could mean if you’re thinking of moving.
We look at what’s happening from week to week in our rate tracker, but it can take much longer before changes to rates are big enough to make a significant impact on monthly mortgage repayments.
In July 2023, mortgage rates were at peak highs after a period of stubbornly high inflation figures.
The good news is, while mortgage rates are still high compared to just a few years ago – before the Bank of England started raising interest rates – average monthly payments are now considerably lower than they were in July last year.
For buyers with a 20% deposit, the current average rate for a 5-year fixed, 80% LTV mortgage is 4.76%, down from the peak of 6.12% last July. In real terms, this means the average monthly mortgage payment has fallen from £1,096 last year, to £949 this month (-£147).
The average price for a first-time buyer home varies based on the location, which means you could be saving more than that, or slightly less. Take a look at the average first-time buyer house price in your local area, and how monthly mortgage payments have changed since last year:
| Region | Average asking price | Average monthly mortgage payment | Monthly mortgage payment saving (£) vs July 2023 | Monthly mortgage payment saving (%) vs July 2023 |
|---|---|---|---|---|
| East Midlands | £192,838 | £805.68 | -£122 | -13% |
| East of England | £273,670 | £1,143.39 | -£189 | -14% |
| London | £509,085 | £2,126.96 | -£313 | -13% |
| North East | £133,581 | £558.10 | -£79 | -12% |
| North West | £176,972 | £739.39 | -£84 | -10% |
| Scotland | £140,051 | £585.14 | -£93 | -14% |
| South East | £294,605 | £1,230.86 | -£203 | -14% |
| South West | £252,158 | £1,053.52 | -£196 | -16% |
| UK | £227,191 | £949.20 | -£147 | -13% |
| Wales | £185,482 | £774.94 | -£95 | -11% |
| West Midlands | £194,448 | £812.41 | -£111 | -12% |
| Yorkshire and The Humber | £176,065 | £735.60 | -£102 | -12% |
If you’re thinking of buying your first home and would like to get an idea of how much you could borrow, and what your average monthly repayments could look like, our mortgage calculator is a good place to start. We can also take you step-by-step through the process of buying.
Read more about mortgage terms and how they work
Why have mortgage rates been falling?
A Base Rate cut during the summer months was expected by the financial markets and lenders, and the cut on 1 August, combined with the certainty of a new government post-election, has given lenders the confidence to continue with rate cuts. We’ve even seen mortgage rates start to fall more sharply in recent weeks.
Our property expert, Tim Bannister, says: “It’s early days, but the acceleration in mortgage rate drops since the Bank Rate cut means that home-movers are starting to see some tangible affordability improvements, particularly against the peak-rate period of just over a year ago. A saving of nearly £150 in monthly outgoings for a first-time buyer compared with last year is significant, and though there will be many hoping rates drop further soon, we’re heading in the right direction ahead of the Autumn season.”
The header image for this article was provided courtesy of Minors & Brady, Wroxham
READ MORE: What can you buy for the average first-time buyer asking price?
