The average monthly mortgage payment for a new buyer has fallen by £119 year-on-year despite property asking prices edging up, according to latest data from Rightmove.
Rightmove’s latest monthly mortgage tracker shows that the national average monthly mortgage payment in January stood at £1,592, based on an average asking price of £368,031.
That represents a 7% (£119) reduction compared with January last year, even though the average asking price of a home has risen by 0.5% over the same period. Lower mortgage rates have offset the modest rise in property values.
However, a sharp monthly increase in asking prices at the start of the year means buyers are paying £35 more per month than in December 2025, when the average asking price was £358,138.
IMPROVED AFFORDABILITY
The average 2-year fixed mortgage rate in January was 4.23%, down from 4.99% a year earlier. Rightmove’s calculations assume a 20% deposit, a 25-year term and are based on average 2-year fixed rates with a circa £999 fee, excluding specialist lending.
First-time buyers are also seeing improved affordability compared to last year.
The average asking price for a typical first-time buyer property was £225,544 in January, equating to an average monthly mortgage payment of £975 – down from £1,062 a year ago. A 20% deposit at this level would be £45,109.
REGIONAL VARIATIONS
Regionally, the cash benefit of lower mortgage rates varies significantly. Buyers in London have seen the largest year-on-year drop in monthly mortgage payments, down £207 to £2,940, reflecting the higher cost of homes in the capital.
By contrast, buyers in the North East have seen the smallest annual reduction, down £38 to £853, as faster local price growth has offset some of the savings from lower rates.
Elsewhere, average monthly payments now stand at £2,000 in the South East (down £195 year-on-year), £1,784 in the East of England (down £149) and £1,599 in the South West (down £135). In Scotland, the average monthly payment is £809 (down £51), while in Wales it is £1,117 (down £109).
For existing borrowers, the average 2-year fixed remortgage rate in January was 4.32%, down from 5.14% last year. The average buy-to-let rate was 4.84%, compared with 5.51% a year ago.
CONFIDENCE BOOST
Rightmove’s monthly confidence tracker also indicates improving sentiment, with net confidence among buyers and sellers in January returning to its highest level since September 2025.
Matt Smith, mortgage expert at Rightmove, says: “We saw some headline grabbing low mortgage rates being offered by lenders at the end of 2025 and into January, which saw average rates drop to their lowest level since before the mini-Budget.
“Since then, rates have stabilised and even ticked up marginally in places as the cost of funding mortgages has become more expensive, due to global and domestic economic events.”
WELCOME NEWS
Nathan Emerson, CEO at Propertymark, says: “A year-on-year reduction of monthly mortgage payments is welcome news. Many households have endured significantly higher housing costs in recent years due to the cost-of-living crisis, so this level of saving will make a meaningful difference, particularly alongside expectations that energy bills may fall from April.
“This improvement is likely being driven by lenders responding to reductions in the Bank of England base rate, resulting in more competitive and affordable mortgage products coming to market.
“With inflation now at 3% and moving closer to the Bank’s 2% target, there is cautious optimism that further base rate cuts could follow later this year. That would help ease cost pressures for millions and could stimulate additional activity across the UK housing market.”
AFFORDABILITY CHALLENGE
But he adds: “However, while this reduction is encouraging, affordability challenges have not disappeared. Many homeowners coming to the end of fixed-rate deals may still face payment shocks, and prospective buyers, particularly first-time buyers, continue to struggle with deposit requirements and overall housing costs.
“Lower mortgage rates must be supported by improved housing supply and targeted assistance if we are serious about enabling more people to step onto and move up the property ladder.”
