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Mortgage interest grew as a proportion of household spend pre-pandemic

  • 16/03/2021
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Mortgage interest grew as a proportion of household spend pre-pandemic
The Office for National Statistics has issued figures showing a rise in average mortgage interest payments in the year before the pandemic hit.



The data revealed mortgage interest payments rose from 5.5 to 5.8 per cent of households’ average weekly expenditure in the financial year to end-March 2020.

The average weekly spend on mortgages for a primary dwelling rose to £169.20, or 13.3 per cent of total expenditure, in 2019-20, compared to £162.10, or 13.2 per cent, the year before.

The topline figure comprised £73.10 on mortgage interest payments, £92.60 on capital repayments, and on mortgage protection premiums, £3.40.

The breakdown for the previous financial year, was £68.10 on interest, £90.50 on capital, and £3.50 on protection.

While capital repayments remained steady at 7.3 per cent of total expenditure, and protection also held at 0.3 per cent, interest payments grew as a proportion of household expenditure.

The average gross expenditure on rent had dropped, to £156.00 weekly, or 25.6 per cent of total outgoings, in 2019-20, down from £149.80, or 25.8 per cent the total, the year before.


By earnings and region

The top ten per cent of high earners spent on average £257.00 a week on mortgage costs, compared to £126.30 for the lowest 10 per cent by income.

For renters, this was £365.30 for the highest-earning 10 per cent, against £128.00 for the lowest earners. 

By region, the top three places for highest average weekly mortgage expenditure were London at £227.60, the south East at £214.10 and the East at £197.70. 

The lowest three were the North East, £113.50, Northern Ireland at £123.20 and Yorkshire & the Humber, £133.80.

For renters, the top areas were again London, at £263.40 per week, the South East, £182.90 and East £171.50. The lowest average weekly rentals were in Northern Ireland at £96.50, the North East, £110.30, and East Midlands with £110.60


National trends

Overall average weekly household spending was £587.90, down £15.20 from £603.10 during the year (adjusted for inflation).

Households with the top 10 per cent of incomes spent nearly four times as much as those with the lowest 10 per cent.

Households headed by people age 30 or less spent 41 per cent on housing and food, compared to 30 per cent and 36 per cent in other age groups.

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