Average first-time buyer mortgage payments are over £350 more than five years ago, research from Rightmove has revealed.
Rightmove’s weekly mortgage tracker found the average monthly mortgage payment for a typical first-time buyer is now £931, compared with £578 in 2019, a difference of £353.
However, this is still more than £150 cheaper than the peak in July 2023.
Rightmove mortgage expert, Matt Smith, 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.
“As our regional analysis shows, there are several hurdles for first-time buyers to clear, made more difficult with higher mortgage rates, and payments outpacing wage growth.
“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.”
The calculations are based on a first-time buyer being able to put down a deposit of 20 per cent and spreading the cost of the mortgage over 30 years, on a home which has two-bedrooms or fewer.
The research revealed that the average 5-year fixed mortgage rate for someone with a 20 per cent deposit is now 4.58 per cent, compared with 2.13 per cent in 2019, which has resulted in mortgage payments which are 61 per cent higher than five years ago on average.
Meanwhile, a typical first-time buyer home in Great Britain of two-bedrooms or fewer is now £227,570, compared with £192,221 in 2019, an increase of 18 per cent.
Additionally, the research found that first-time buyers are waiting longer to buy a home and spreading the cost of their mortgage out for longer.
The average age of a first-time buyer is now 33, an increase from the average age of 32 in 2019.
The average mortgage term for a first-time buyer also increased, rising from 29 years in 2019 to 31 years.
Rightmove property expert, Tim Bannister, added: “The improving market conditions compared with last year have led to a recovery in activity in the typical first-time buyer sector.
“We’re seeing more choice in this sector for would-be first-time buyers, and more potential buyers contacting agents versus last year.”
However, he cautioned that, while mortgage rates have improved from the peak, they are still high against recent norms.
“This has led to first-time buyers taking out longer terms, waiting longer to build up their deposit, and looking at cheaper areas to get onto the ladder,” he continued.
“First-time buyer affordability remains stretched and any support that can help more to get onto the ladder would be welcome.”
