This is five per cent higher than pre-pandemic levels in 2019, and 4.7 per cent higher than in 2017 and 3.1 per cent higher than in 2011 – according to research from Octane Capital.
The report said this showed that the cost of mortgage was nearing levels seen during the great recession in 2008 and 2009, where average monthly repayments made up 34.2 per cent of monthly income.
The figure is based on an average house price of £276,019 and a three-year fixed rate at 75 per cent loan to value (LTV), along with an average monthly salary of £2,621, or £31,452 annually.
Octane Capital’s chief executive Jonathan Samuels (pictured) said that the cost of living crisis was a “current cause of great concern” and many homeowners are dealing with inflated costs of daily living and rising monthly costs of mortgages due to interest rate rises.
“At the same time, wage growth has simply failed to keep pace with these rising costs and so the proportion of our income required to cover our monthly mortgage commitments is now substantially higher than it has been for many years,” he added.
Samuels said that this cost was only set to grow as further interest rate rises are expected during the year.
“The best advice for those currently struggling is to consult a mortgage professional and see if they can swap to a product offering a better rate. For those currently looking to buy, it’s vital to factor in any potential increase and not to borrow beyond your means based on current rates,” he said.
He added that the current cost of borrowing remained “fairly favourable”, but it is important to consider how interest rate rises may impact borrowers financial stability as borrowing the maximum amount available could cause struggles further down the line.