Mortgage payments can drop as much as 25% per month

Every month mortgage wages could drop by 25 percent within the next 12 months, according to research done by Quilter. This comes after the Government’s latest house prices data showed the value of a UK property to be £294,910 in November 2022. Free interest has risen sharply over the past year as the Bank of England has raised the base rate in an attempt to reduce the impact of inflation.

Mortgage rates for home owners rose by six per cent after Prime Minister Liz Truss’s government’s financial crisis.

Anyone who bought a property at this price of £294,910 with a mortgage with a duration of 25 years, with an 80 per cent loan to value ratio, would be faced with monthly mortgage payments of £1,520.

This represents a 66 per cent increase on the £918 per month mortgage rate for the same property and commercial mortgages a year earlier.

With experts looking ahead to November 2023, if house prices fall by eight per cent while Halifax rates and mortgages continue to be at their current low of around four percentage, the average house price in the UK can fall to £ 271,317.

READ MORE: ‘World beating’ Isa savings option returns 6.6% with more to come

As a result, monthly mortgage payments will be reduced by 25 per cent compared to the previous year to £1,145.

According to this, if this information is correct, November 2023 will be a “good thing” for homeowners and people may be motivated to buy a new home.

Karen Noye, a mortgage expert at Quilter, breaks down what families can expect to happen later in the year.

He explained: “Rising mortgage rates have played a significant role in the affordability of buying a first home or moving house, and for many of these rates have been pushed to higher levels by the capacity.

DON’T MISS:

“It is therefore very reassuring to look forward that we can expect to see a significant decrease in monthly mortgage payments by the end of the year as housing and mortgage prices continue to fall as to be expected.”

According to the mortgage expert, some areas in the UK have been more affected by the increase in house prices and ended up on the payment of mortgages after the help of the Bank of England.

Overall, the North West of England witnessed the most significant growth in monthly wages over the past year.

In contrast, residents of London have seen the smallest increase in percentage during this period.

READ MORE: Concerns persist even as the UK economy continues to grow

However, those who live in the capital of the United Kingdom are left paying more mortgages because the prices are too high.

As it is, the national rate is 3.5 percent which has caused interest and mortgage payments to rise.

With inflation showing signs of slowing, homeowners will expect mortgage rates to follow suit in the coming months.

Ms Noye added: “However, there is no evidence that the changes in the housing market will materialize in the way predicted.

“The cost of living is very high and it has seriously affected people’s purchasing power, especially with the increase in energy bills, but thankfully we have look now towards the climax.

“Low inflation should mean that interest rates are stable and even begin to fall below the mortgage rate that follows it.

“This could result in mortgage rates falling by as much as four percent by the end of the year and may go even lower in the future.” will have no real impact on monthly mortgage rates, especially for those on mortgage rates, and may see more people considering buying. a new house because it is expected to be more affordable.

“The last few years have shown uncertainty in the housing market, but hopefully we are now out on the other side of what has been a very volatile few years and will gradually improve. let’s see a higher level of inflation.”

Leave a Comment