First-time buyers are paying £350 per month more for their mortgage than they were five years ago, analysis finds.
The average monthly mortgage payment for a typical first-time buyer is now £931, compared with £578 in 2019, according to Rightmove data.
However, first-time buyers’ payments are still more than £150 cheaper than the peak in 2023.
The average five-year fixed mortgage rate for someone with a 20% deposit is now 4.58%, compared with 2.13% in 2019, which has resulted in mortgage payments that are 61% higher than five years ago, on average.
Meanwhile, a typical first-time buyer home of two bedrooms or fewer is now £227,570, compared with £192,221 in 2019 – an increase of 18%.
To help with affordability issues, first-time buyers are waiting longer to buy a home and spreading the cost of their mortgage out for longer.
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The average age of someone buying their first home is now 33, compared with 32 in 2019, while the average mortgage term for a first-time buyer is now 31 years, compared with 29 years in 2019, based on UK Finance data.
Regional affordability issues
Buyers’ affordability across the country is being stretched in different ways.
In London, the average asking price for a first home is nearly five times the average annual salary of two people, the most of any region.
In the North West, average mortgage payments are up by 75% versus 2019 and the average asking price for a home is up by 29% over the same period, the highest increase of any region.
In Yorkshire and the Humber, the average monthly mortgage payment is up by 74% compared with five years ago, yet average wages in the region have only risen by 25%. This is the biggest gap in wage growth and mortgage payment increases across Great Britain over the last five years.
Matt Smith, Rightmove’s mortgage expert, said: “Market regulation has had its intended impact to help prevent people from overstretching themselves when taking out a mortgage. It also means that there are many people out there, particularly first-time buyers, who find themselves priced out of the home that they want because they can’t borrow enough or pass the stressed rate test.
“Lenders, both new entrants to the market and major lenders, have looked at how they can work within the existing framework to provide more support to first-time buyers, which has been really encouraging to see. We think there is the opportunity for the government to help unlock greater long-term affordability in a responsible way through a wider review of affordability criteria alongside the regulators and lenders.”
