This is how much more first-time buyers are paying on their monthly mortgage compared to five years ago

First-time buyers‘ monthly mortgage payments are £350 higher than they were five years ago, according to Rightmove. 

The average monthly mortgage payment on a typical first-time buyer property, one with two beds or fewer, is now £940 compared to £590 in 2020, analysis by the property portal shows.

However, they were paying more on average in 2023 when the typical monthly payment peaked at £1,095 due to high mortgage rates. 

Rightmove’s analysis assumes a first-time buyer with a 20 per cent deposit, taking a mortgage on a 30-year term. 

Most first-time buyers can secure rates between 4 and 5 per cent today, depending on how big their deposit is.

But while mortgages are costing first-time buyers more than they were at the start of 2020, many will find they can actually borrow more than was possible five years ago. 

This is because average wage growth has outpaced the rise in average asking price for a typical first-time buyer property. 

Average earnings have grown by 30 per cent in the last five years, compared with a 17 per cent increase in the price of a typical first-time buyer home, according to Rightmove.

This has slightly increased the borrowing power of first-time buyers, who are typically limited to a mortgage of 4.5 times their income. 

However, whether or not property feels more affordable will depend on where someone lives in the UK, and whether they are buying alone or in a couple. 

In more than half of UK regions, a first-time buyer on a typical salary would not be able to afford the typical first home on their own. This is based on borrowing 4.5 times their salary and having a 10 per cent deposit. 

In London, an average first-time buyer type property is still 6.8 times the national average wage of two people, at £500,066.

This compares with the North East, where a typical first home is 1.8 times an average joint income at £132,854.

Matt Smith, a mortgage expert at Rightmove says: ‘Higher mortgage rates mean home-movers need to consider how much they can afford to pay each month on a monthly mortgage, even if they can meet the asking price of a home. 

‘Another measure of affordability which is restricting some first-time buyers from getting onto the ladder is how much they can borrow. 

‘It’s encouraging to see that the regulator is considering how they may be able to enable first-time buyers to borrow more in a responsible way, as we think this will help to unlock more opportunity, particularly for those with smaller deposits.’

More expensive: First-time buyers are paying £350 more each month on their mortgage than they were in 2020, according to Rightmove – but still less than at the 2023 peak