In January, the average mortgage interest rate was 2.53%. How does that compare to yours?

Some eye watering statistics from The Money Charity this week.  The Charity has reported that total mortgage lending stood at £1.37 trillion at the end of January.  This is up from £1.32 trillion in 2017.  Averaged over the 11.1m households with a mortgage, this equates to £123k per home in January.

The average interest rate was 2.53% at the end of January.  Product offerings now exceed 11,000 across the market and rates start from circa 1%.

There were 24,840 loans approved for house purchase in January, according to UK Finance, 5% lower than a year earlier.  The average loan approved was circa £189k.

This decrease is interesting as it is a common knowledge that owning a home can be cheaper than renting.  The report goes on to suggest that inclusive of all benefits, private renters spent an average of 34% of their income on rental payments.  In comparison, people who owned their home only spent on average 18% of income.

The Ministry of Justice reported that 47 mortgage possession claims were issued every day, throughout quarter four 2017.  31 mortgage possession orders were made every day.  18 properties were repossessed every day.

And just because this caught my eye - Child Poverty Action Groups ‘The Cost of a Child in 2017’ report estimates that couple families now spend £155,142 on raising a child to their 18th birthday - £23.61 a day!  This is up 2.4% compared to last year.

This will go some way towards why the report suggests that around 9.45m (35%) households have no savings, while a further 2.97m (11%) have under £1,500. 

I know, stark figures indeed.  But sometimes we do just need to review what we have, where we are at and how can we change things.   It always surprises me how few people know what rate they are on, the type of mortgage, i.e., fixed rate, tracker rate, etc, and whether they are paying interest only, or capital repayment.  Unsurprisingly, almost everyone knows what it costs per month to the nearest penny! They will haggle for a £10 discount on a new washing machine, or sky TV,  but will stay with the current lender when their ‘promotional rate’ period comes to an end, ‘brush it under the carpet’, and deal with it ‘tomorrow’. But, we all know tomorrow never comes.  A review of what’s on offer from other Lenders could give you a nice surprise and probably a few extra pounds in your pocket!  

Home owning cheaper than renting

Some eye watering statistics from The Money Charity this week.  The Charity has reported that total mortgage lending stood at £1.35 trillion at the end of September.  This is up from £1.275 trillion in 2015.  Averaged over the 11.1m households with a mortgage equates to £118,693 in September.

The average interest rate was 2.74% and according to The Council of Mortgage Lenders, the average for new loans was 2.27%.  They also suggested that the average First Time Buyer deposit was 15% (£28k in July) and the average house price amounted to £184k (August) for first timers.  Yet First Time Buyers borrowed on average just 3.45 times their income! 

There were 40,533 loans approved for house purchase in September, according to the British Bankers Association, similar numbers to a year earlier.  The average loan approved was circa £176k. 

This is interesting as it is a common knowledge that owning a home can be cheaper than renting.  The report goes on to suggest that inclusive of all benefits, private renters spent an average of 43% of their income on rental payments.  In comparison, owner occupiers spent on average 19% of income.

And as we enter the run up to Christmas, it's also useful to note that the average interest rate on credit card lending in September was 18.49%, which is 18.24% above the Bank of England Base Rate of 0.25%!   Remember, doesn't matter which type of credit you use to fund seasonal spends, at some point they all need to be repaid!

And finally, a number of lenders including Platform (Part of Co-op), Virgin Money, Nationwide, Coventry Building Society, Barclays, Halifax and TSB have all changed rates in the last ten days.  The majority with rate cuts and attractive options for new customers including cash back for purchases and free valuation and free legals on remortgages.  There are certainly some fantastic deals available in the current climates.  So if you are thinking of reviewing your mortgage options, now might just be a good time to find that paperwork!

The average Mortgage interest rate was 3.22% at the end of May.

I've been very positive and buoyant in most of my recent columns.  The mortgage market is awash with business and has more product offerings than for some years.  Local Estate Agents confirm properties are selling quickly and there's a general shortage of stock and local builders have advised that bricks are in such high demand across the country that there are some weeks delay in supply.  However, we do sometimes need to take a step back and look at the reality of our market and economy.

The Money Charity (the UK’s financial capability charity), report that:

- The average amount owed per UK adult (including mortgages) was £28,610 in May. This was

around 115% of average earnings

- The estimated average outstanding mortgage for the 11.2m households that carry mortgage

debt stood at £115,006 in May

- The Financial Conduct Authority estimates that at the end of Q1 2014 there were 255,561 mortgage loan accounts in reportable arrears (i.e. arrears of over 1.5% of current loan balance), a drop of 3.5% from the previous quarter, and the lowest figure since Q1 2007.

- One in every 400 mortgages was 10% or more in arrears.

- 71 properties are repossessed every day (based on Q1 2014 trends).

- 1,910 Consumer County Court Judgments (CCJs) are issued every day (based on Q1 2014

trends). The average value of a Consumer CCJ in Q1 2014 was £2,360.

Ok, so a little disheartening, but reality.  It's not all bad though as the UK economy grew by 0.8% in the first quarter of 2014, according to latest estimates from the Office of National Statistics and The Bank of England Base Rate has been held at 0.5% for 63 months.  Whilst the average Mortgage interest rate was 3.22% at the end of May.

Finally, according to the Council of Mortgage Lenders (CML), the typical first-time buyer deposit in April was 17% (around £29,260). The average first-time buyer borrowed 3.42 times their income and the average first-time buyer loan was an estimated £142,857.