The latest study has found that those in the process of buying a home are already reaping the benefits of rising affordability within the market caused by lenders cutting their mortgage rates.
Octane Capital, a specialist mortgage lender, carried out this research and found that average mortgage payments per month for people who bought a home last month were £64 below the figure for July.
The company also sought to compare fixed five-year mortgage costs for people putting down deposits of 25% of the existing average property price, which is £289,824, between July and September. Those who bought during July faced an average rate of 5.79% on that fixed five-year loan, which amounted to payments of £1,373 a month. If they secured an interest-only mortgage, the payments were £1,049 on average.
However, for those completing their purchases last month, average fixed five-year rates had fallen to 5.3%. That left them with payments of £1,309 or just £906 for those on interest-only deals. It amounts to a saving each month of £64 in comparison to the peak period of the summer for people on standard mortgages or £89 a month for those on interest-only ones.
Speaking to Mortgage Strategy, the CEO of Octane Capital Jonathan Samuels said:
“For buyers, it means things are becoming more affordable which aligns nicely with the upcoming autumn rush on the housing market.”
Any advisors who have done a CeMAP course should be delighted by this news too, as greater affordability for buyers will translate into more available work for them.