First-time buyer monthly mortgage repayments £150 lower than peak

Caz Blake-Symes • September 10, 2024

Adapted from a Rightmove, Property News article September 4, 2024

Rightmove 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. 


They look at what’s happening from week to week,  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 across the UK, 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:


In the South West the average asking price is £252,158 with an average monthly mortgage payment of £1,053.52, representing a saving of  -£196 compared to July 2023.



If you’re thinking of buying your first home and would like to get an idea of how much you could borrow, please call us and we can discuss all your options and repayment costs.


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.

Rightmove’s 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.” 


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Boost to buying power from changes to affordability tests

By Caz Blake-Symes • May 1, 2025
Adapted from Zoopla’s April 2025 Housing report I mage: The analysis uses average house prices from the house price index and for first-time buyers to assess mortgage payments at different mortgage rates applied to a 30- year mortgage, at different loan-to-values. One emerging trend that we expect to positively support market activity in the coming months is a relaxation in how lenders assess the affordability of new mortgages. While buyers focus on the mortgage rate they will pay, lenders also check whether the borrower can afford a 'stressed mortgage rate' at a higher level than the borrower will pay. ​ While the average 5-year fixed rate mortgage is around 4.5% today, many lenders are currently 'stress testing' affordability at 8-9%. This makes it harder to secure a mortgage without a large deposit. If average mortgage stress rates were to return to pre-2022 levels of 6.5% to 7%, this would deliver a 15-20% boost to buying power. ​ An average first-time buyer with mortgage repayments of £1,020pcm at a 4.5% mortgage rate would typically have to prove they could afford monthly repayments of £1,550pcm at an 8.5% stress rate. If the stress testing is relaxed to 6.5%, repayments would fall to £1,275pcm, boosting buying power. It's a similar pattern for the average homeowner, while the actual impact will vary by lender and type of borrower. ​ This change would consequently supporting demand and sales volumes, helping to clear the stock of homes for sale, rather than boosting house prices. Other existing rules and regulations that remain in place will continue to impact the availability of mortgage finance.  Comment from Phil Clark “This is potentially very exciting news and will give borrowers a greater choice of products if these rules are relaxed. Regardless of whether you are a First-time Buyer, Looking to move, remortgage or invest in property, there are a huge range of competitive mortgage deals on the market. I will be delighted to discuss your specific requirements and offer you the most suitable deal!” Please call Phil on 0117 3251511 or email info@swmortgages.com For more information about the Mortgage and Protection products we offer, please visit www.bristolmortgagesonline.com Your home/property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.

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By Caz Blake-Symes • February 19, 2025
Adapted from BBC Article by Kevin Peachey, Cost of living correspondent 13 February 2025 Two major lenders launched mortgage deals on Thursday with interest rates of less than 4%, as competition picks up in the sector. The prospect of further cuts in the base rate by the Bank of England has given mortgage providers confidence to reduce their own rates. But the attention-grabbing sub-4% deals by Santander and Barclays will not be available to all borrowers, particularly first-time buyers, and may come with a hefty fee. The return of such deals might prompt other lenders to follow suit after a period of tepid competition. Nationwide, the UK's biggest building society, has said it will reduce some of its rates on Friday. Mortgage deals with interest rates below 4% have not been seen since November. Across the whole market the average rate on a two-year fixed deal is 5.48%. The typical rate on five-year deals is 5.29%, according to latest figures from Moneyfacts. Time to decide Some tracker and variable rate mortgages move fairly closely in line with the Bank's base rate, which was cut to 4.5% a week ago. However, more than eight in 10 mortgage customers have fixed-rate deals. The interest rate on this kind of mortgage does not change until the deal expires, usually after two or five years, and a new one is chosen to replace it. About 800,000 fixed-rate mortgages, currently with an interest rate of 3% or below, are expected to expire every year, on average, until the end of 2027. That means a higher monthly bill for many homeowners on their next renewal, but there are signs that the rate they could pay is on its way down.  Bank of England governor Andrew Bailey said the interest-rate setting committee expected to be able to cut rates further "but we will have to judge meeting by meeting, how far and how fast". This will affect savers who are seeing lower returns, but could bring better news for borrowers. The Bank's next rates decision is on 20 March. Message from Phil Clark “Regardless of whether you are a First-time Buyer, Looking to move, remortgage or invest in property, there are a huge range of competitive mortgage deals on the market. I will be delighted to discuss your specific requirements and offer you the most suitable deal!” Please call Phil on 0117 3251511 or email info@swmortgages.com For more information about Mortgage and Protection please visit www.bristolmortgagesonline.com
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