The online mortgage firm also found nearly 1.4 million people were paying over £1,000 a month on their mortgage.
mform blamed the findings on higher prices and loan amounts since 2002/3, but also noted a significant rise in application and exit fees during this period which helped contribute to the increase.
Eamonn Rice, chief executive of mform, said: “Compared to last year, prices have increased by 7.7 per cent and with the possibility of a further rate increase, the size and cost of a mortgage will continue to rise.”
Rice also highlighted the importance of getting the right loan for the customer’s circumstances, especially when it came to first-time buyers.
“The difference in the 25 per cent most competitive and most expensive fixed rate mortgages for a typical first-time buyer is 1.26 per cent. On a typical first-time buyer mortgage of £108,000, this could reduce repayments by £1,360 a year.”
Jason Richardson, director at YooToo Financial Services, believed lender fees had contributed to the increase, but said this trend couldn’t continue.
“Bearing in mind banks can’t keep increasing fees if they want to stay competitive, this rate of increase is unsustainable. If they do, we will see a trend towards longer-term fixed rates as people won’t want the bother and cost of remortgaging.”
