Monthly mortgage payments ‘could drop 25% by year end’

Home > News > Monthly mortgage payments ‘could drop 25% by year end’

Reported by Robyn Hall from The Negotiator

New analysis shows average mortgage payments rose by 66% in the last year but analysis from wealth manager Quilter shows they could drop by a quarter come the end of the year.

Monthly mortgage payments could fall by as much as 25% by the end of the year, analysis from wealth manager Quilter shows.

The latest government house price index data shows that in November 2022, the average UK property cost £294,910. During the same period, mortgage rates peaked at around 6% in the aftermath of the mini-budget.

Those who purchased a property at this price and mortgage rate with a term of 25 years and an 80% loan to value ratio will be facing a monthly mortgage payment of £1,520 – some 66% more on the £918 for the equivalent property and mortgage deal a year earlier.

EQUIVALENT

Quilter says that looking ahead to the equivalent in November 2023, should house prices fall by 8% as Halifax recently predicted and mortgage rates continue on their current downward trend to around 4%, the average UK house price could dip to £271,317 with monthly payments falling by 25% compared to a year earlier to £1,145.

Karen Noye, Quilter

Karen Noye, mortgage expert at Quilter, says: “Rising mortgage rates have played a significant role in the affordability of buying a first home or moving home, and for many these costs were pushed to unaffordable highs.

“It is therefore a real positive that looking forward we can hope to see such a significant dip in monthly mortgage payments by the end of the year should house prices and mortgage rates continue to fall as expected.”

There is no guarantee that the changes in the housing market will materialise.”

But she warns: “There is no guarantee that the changes in the housing market will materialise in the way that has been predicted.

“Lower inflation should mean interest rates stabilise and even start to drop with mortgage rates following suit. This could result in mortgage rates dropping to 4% by the end of the year and potentially even lower in the future.”

Share this article

Related News Articles

Bank raises interest rate again as expected to 4.5%

The Bank of England has raised interest rates by 0.25% to 4.5% as expected today, after a majority of the Bank’s Monetary Policy Committee (MPC), headed by Governor Andrew Bailey (pictured) voted for the increase again. This increase is the 12th successive rise, taking the rate to its highest level in almost 15 years. The Bank is reacting to a stubborn inflation figure,...

11/05/2023

Our lettings department received a welcomed gift and 'thank you card'

It's so nice to receive a thank you gift and a card even in these challenging times Mum and daughter have been tenants of ours for nearly 7 years, they're now off to pastures new We will miss you Thank you from the whole team here at Adkins Property

08/02/2023

Falls in UK mortgage costs predicted amid return of ultra-low interest rates

Banks and building societies look set to cut the costs of UK fixed-rate mortgages in the short- to medium-term after the International Monetary Fund (IMF) predicted that ultra-low interest rates will soon return with inflation due to fall sharply in the coming months. A number of homeowners have been hit hard by a steep increase in mortgage costs in recent months. But the Unit...

12/04/2023

Big Demand for Small Properties as budgets tighten

Big demand for small properties has helped to drive growth in UK property prices in the early months of this year, according to new research by Halifax. At a national level, annual property price growth reached +1.9% in February this year, having plunged as low as -4.1% in October 2023. In cash terms prices are up by £5,318 over the last year and are only £7,801...

29/04/2024