Mortgage holders save £119 a month as repayments fall to 'headline-grabbing low'

The seven per cent annual decline reflects a combination of lower mortgage rates and modest house price growth over the period.

The average two-year fixed mortgage rate fell to 4.23 per cent in January, down from 4.99 per cent 12 months earlier.

However, national asking prices increased by 0.5 per cent year-on-year to reach £368,031 in January.

Rightmove’s calculations assume buyers provide a 20 per cent deposit and repay their mortgage over 25 years on a two-year fixed deal with fees of around £999.

Homebuyers in London recorded the largest monthly savings, with average repayments falling by £207 to £2,940.

Rightmove said higher property values in the capital mean reductions in interest rates result in larger cash savings.

The average asking price in London stood at £679,782 last month.

In contrast, buyers in the North East saw the smallest reduction, with average monthly repayments dropping by £38 to £853.

Rightmove said homes in the North East remain the most affordable in Britain, although stronger house price growth in the region has offset some of the benefit from lower mortgage rates.

Average asking prices in the North East reached £197,264 in January.

First-time buyers have also experienced a decline in monthly costs.

Typical repayments for those purchasing their first home now average £975 per month, down from £1,062 in January 2025.

The average asking price for a starter property reached £225,544 last month.

Based on a 20 per cent deposit, first-time buyers would need to save approximately £45,109 before entering the market.

Monthly costs have risen slightly since December, when the national average asking price was £358,138.

The increase in January means new purchasers would pay around £35 more per month than at the end of last year.

Matt Smith, mortgage expert at Rightmove, said: "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."

He added: "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."

Homeowners looking to remortgage have also benefited from improved rates.

Average two-year fixed remortgage rates have fallen to 4.32 per cent from 5.14 per cent a year earlier.

Buy-to-let investors have seen average two-year fixed rates decline to 4.84 per cent in January, compared with 5.51 per cent 12 months previously.

Rightmove’s latest house price index, published on Monday, showed newly listed properties averaging £368,019 in February, indicating relatively stable pricing conditions at the start of the year.