Mortgage payments could drop by 25% a month in ‘real positive’ for homeowners

 

Mortgage payments could drop by 25% a month in ‘real positive’ for homeowners

Homeowners and those looking to get onto the property ladder could see their mortgage payments fall significantly by the end of the year.

Monthly mortgage payments may drop by 25 percent within the next 12 months, according to research carried out by Quilter. This comes after the latest Government house price index data showed that the average UK property cost £294,910 in November 2022. Interest rates have risen dramatically within the last year as the Bank of England has hiked the base rate in an attempt to mitigate the impact of inflation.

Mortgage rates for homeowners peaked at six percent in the aftermath of the disastrous mini-budget from former Prime Minister Liz Truss' government.

Anyone who bought a property at this price of £294,910 and mortgage rate with a term of 25 years, with a 80 percent loan to value ratio, will be facing a monthly mortgage payment of £1,520.

This represents a 66 percent increase on the £918 a month mortgage payment for the equivalent property and mortgage deal the year before.

With experts looking ahead to November 2023, if house prices were to drop by eight percent as Halifax forecast and mortgage rates continue on their current downward trend to around four percent, the average UK house price could dip to £283,113.60 Mortgage  payments could drop by 25% a month - ‘real positive’ for homeowners. As a result, monthly mortgage payments would decrease by 25 percent compared to a year before to £1,145. 

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