Mortgage rates continue to rise in February
The latest data from the Bank of England revealed that overall average mortgage rates for new business increased again in February 2023, with floating rate mortgage rates increasing on average by 2.8% and fixed rate mortgages by 10.0%
What the Bank of England said
The average floating mortgage rate for new business was 4.41%
The average fixed mortgage rate for new business was 4.23%
The average overall mortgage rate for new business was 4.26%
Twindig take
As Bank Rate continues to rise it is no surprise that mortgage rates continue to increase. Banks are very quick to pass on the increased costs of doing business
We now estimate that the average mortgage payment on the averagely priced home (assuming an 80% LTV mortgage) is now £1,228 per month. Average mortgage payments increased by £58 over the last month reflecting the increase in house prices and mortgage rates.
One year ago the average mortgage payment on the average home was £902, the payments have therefore increased by £326 or 36%. A very clear and blunt reminder of the housing impact on the cost of living crisis.
However, we note that mortgage approvals increased in February, suggesting that despite the elevated costs many are still able to move home.
We show in the chart below how the average mortgage payment has changed over time:
