First-time buyer
A first-time buyer recently purchased their £250,000 home with a 10% deposit and a competitive 2.1% mortgage two-year rate in October 2021.
However, with the rising base rates, the current average two-year fixed mortgage rate of 6.66% will significantly impact their monthly payments. In fact, their payments will increase by £640, amounting to a total of £1,712 per month.
Even with a relatively high salary of £45,000, which exceeds the national average, more than half of their take-home pay will now go towards mortgage payments, compared to just over a third before the renewal.
Mid-way through
Another homeowner is currently renewing their mortgage on a semi-detached home that they purchased a decade ago. They still have 15 years left on their mortgage and a remaining balance of £100,000.
As their current rate of 1.59% is expiring, their monthly payments are set to increase from £625 to £879, based on the current average mortgage rate.
Nearing the end
Lastly, an individual who bought their detached home over two decades ago is now approaching the end of their mortgage term, with only two years remaining and £7,000 left to pay off.
For the past two years, they have enjoyed a low 1.59% mortgage rate, resulting in monthly payments of £297.
Despite the modest remaining balance and relatively low monthly payments, if they choose to remortgage at the current average market rate, their payments will increase slightly to £312 per month.
This article is regularly updated to provide the latest information.
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