The company’s research revealed that the average annual cost of a mortgage is around £6,284, compared to £4,711 three years ago.
mform said the main reasons for the growing cost of mortgages are rising property prices and increasing rates on home loans. Research commissioned by mform showed that the average mortgage rate today is 5.41% compared to 4.29% three years ago. In addition to this, there has been a significant increase in the size of mortgage application and exit fees.
Eamonn Rice, chief executive of mform, said: “Compared to last year, house prices have increased by around 7.7% and with the possibility of a further rise in the Bank of England base rate, the size and cost of a mortgage will continue to rise.
“However, with thousands of mortgages on the market, it can be very confusing when choosing one, which is something we hope to address. With so many loans to choose from it’s possible to wipe hundreds or thousands of pounds a year off your repayments by just shopping around for the best deal. For example, the difference in the 25% most competitive and most expensive fixed-rate mortgages for a typical first-time buyer is 1.26%. On a typical first-time buyer mortgage of £108,000, this could reduce repayments by around £1,360 a year.”
As mortgage costs continue to rise, mform's research revealed there are now some 1.38 million people who are spending over £1,000 a month on their mortgages. Some 55% of these live in London, where property prices are at their highest.
