Jump to main content of pageaccessibility informationSitemap
5 Aug 2020

News

Mortgages payments – are you better off than 10 years ago?

The average house price has almost trebled since 1996, and demand for property shows no real signs of diminishing, with some commentators predicting further increases of up to 40% in the next four years due to shortages in housing supply.

Moneyfacts has carried out some comparisons of current economic data and mortgage data with the equivalent statistics from 10 years ago.

The fact that Mortgage Interest Relief at Source (MIRAS) is no longer available is a key factor in the cost differential, but more influential is the fact that average salaries (from mortgage applicants), whilst they have doubled in the last decade, have been far outstripped by house price increases.

Andrew Hagger, Head of news and press at Moneyfacts.co.uk comments:
“The net effect (see table below) is that mortgage payments take a much bigger chunk of our income than they did in 1996. This statistic looks gloomy enough in its own right, but when you factor in additional increased expenses such as higher council tax and utility bills, it is no surprise that the UK is now faced with the current personal debt crisis”.

 

September 1996

September 2006

Bank Base Rate

5.75%

4.75%

Mortgage Rate (SVR)

6.99%

6.75%

Average House Price

£64,692

£181,122

Average Mortgage – First time buyer

£39,811

£110,500

Average Mortgage – Home mover4

£50,000

£127,500

MIRAS Tax Relief

15% on first £30k

Nil

 

Affordability

Average applicant(s) Income – First time buyer4

£17,308 (£1442 pm)

£34,216 (£2851 pm)

Average applicant(s) Income – Home mover4

£24,500 (£2041 pm)

£44,000 (£3666 pm)

Monthly Mortgage cost – First time buyer

£264.84

£763.46

Monthly Mortgage cost – Home mover5

£337.70

£880.91

Monthly mortgage repayment as a percentage of gross monthly income - FTB

18.4%

26.8%

Monthly mortgage repayment as a percentage of gross monthly income - Home mover

16.5%

24%

Source: Barclays Bank Base rates

Source: Halifax SVR for existing borrowers

Source: Halifax UK House Price Index (2006 figures for Aug)

Source: CML median average (2006 figures for July)

Figures based on a capital repayment mortgage over 25 years

NOTES TO EDITORS:

Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry. 

Regular Charts
We can supply you with regular weekly or one-off selection charts on many financial products including savings, mortgages, credit cards and personal loans. Our charts are independent, impartial, totally accurate and up to date. 
Please call Andrew Hagger on 0870 2250 512 for further information

 

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Think carefully before securing other debts against your home, your home may be repossessed if you do not keep up repayments on your mortgage.

Go Direct.co.uk is a trading style for website purposes of Go Direct UK Ltd.

Go Financial Services is a trading style of Go Direct UK Ltd which is an appointed representative of Personal Touch Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales Company 5703224. FCA Number 456600

We normally do not charge a fee for mortgage advice, however this is dependent on your circumstances. Our typical fee would be £500

Remortgages | Mortgage Repayment Guide Remortgage Guide | Life Insurance | Mortgage Protection Life Insurance | Decreasing Term Life Insurance | Accident Sickness Unemployment | Accident Sickness Unemployment Cover | Builds and contents quote | Conveyancing Online | Btl Mortgage | Mortgage Rates | Free Mortgage Advice | Online Mortgage Application | Shared ownership mortgages | Site Map