Mortgage repayments are at their lowest on average since 2008, according to recent research. This is good news for first-time buyers, as low mortgage rates will enable them to get a foot on the property ladder if they have been able to save a decent deposit.
Geographical location makes a significant difference to mortgage affordability, with a clear north/south divide. The most affordable areas to live are in the North West of England, with property in the South East being the least affordable.
Monthly mortgage repayments vary considerably across England and Wales. Average monthly repayment figures in the North of England are £300-£460, in the Midlands they are £350-£420 and in the South of England (including south Wales) they are £400-£637.
These figures reveal that, in theory, moving from the North of England to the South could double mortgage repayments. On the other hand, those thinking of moving north will benefit significantly due to lower property prices there. Increasing petrol, food and energy costs make low mortgage rates the only glimmer of hope in a sea of rising prices, static wages and job losses.
In the light of job uncertainty, lower mortgage repayments give consumers more flexibility to cover other household costs and even save money. Even if rates start to rise again, this period of low mortgage interest rates has enabled some people to consolidate their financial position by paying off credit cards or other borrowing faster than originally planned.
As a proportion of take-home pay, mortgage payments were at their highest in 2008, with a figure of 20.5%. The lowest mortgage payments as a proportion of take-home pay were 15.2%, or £488 per month, in Sep 2011. It is clear that mortgages in general have become more affordable in recent years, but location is the biggest factor in how much money can be saved.
Check out the below interactive infographic for more information: