Mortgage repayments soar 39% over the past decade: Octane –

The average mortgage repayment has risen by 39% to £314 per month over the past decade, with the vast majority of this increase occurring in the past five years alone, according to data from Octane Capital.

Research shows that, based on the current average house price of £285,009, a typical mortgage rate of 3.85%, and after placing a 25% deposit on a 25 year loan, the mortgage repayment average monthly is £1,111.

In 2013, the average house price was £223,983, with rates at 3%, meaning buyers were paying £797 a month, taking inflation into account.

But the study goes on to show that much of that £314 increase has happened over the last five years.

In 2018, the average cost of a mortgage was £860 per month, based on an average mortgage rate of 1.83% at the time.

This means that between 2013 and 2018 monthly repayments increased by £64, just 20% of the total increase of £314 seen over the past decade.

The remaining monthly increase of £250, or 80% of the total, has occurred over the past five years.

Octane Capital Managing Director Jonathan Samuels said: “The average cost of a mortgage has risen significantly over the past decade and although this is largely due to the rising cost of a home, a Much of this growth has occurred over the past five years and, specifically, since December 2021, when interest rates have risen 12 times in a row.

“Following a fairly noticeable reduction in the rate of inflation, many buyers will be eagerly awaiting the Bank of England’s decision next month in hopes of being able to cut rates.

“It’s likely that won’t be the case and we could see the base rate jump to 5%, which could push up the cost of borrowing even more.”