The average monthly mortgage payment for a new homebuyer has fallen by £119 over the past year as lower fixed rates outweigh modest house price growth.

Data from Rightmove shows that the national average monthly mortgage payment in January stood at £1,592, based on an average asking price of £368,031.

That marks a 7% reduction compared to January 2025, despite average asking prices rising by 0.5% year-on-year.

The improvement has been driven by falling mortgage rates, with the average 2-year fixed rate dropping to 4.23% from 4.99% a year earlier.

PAYMENTS STILL HIGHER

However, a sharp monthly rise in asking prices at the start of the year means payments are £35 higher than in December 2025, when the average asking price was £358,138.

Rightmove’s calculations assume a 20% deposit, a 25-year term and are based on average 2-year fixed products with a circa £999 fee, covering around 95% of the mainstream mortgage market.

For first-time buyers, affordability has improved year-on-year. The average asking price for a typical first-time buyer property in January was £225,544, equating to an average monthly mortgage payment of £975. That compares to £1,062 at the same point last year. A 20% deposit would be £45,109.

REGIONAL VARIATIONS

Buyers in London have seen the largest annual fall in monthly mortgage payments, down £207 to £2,940, reflecting the higher loan sizes in the capital.

By contrast, buyers in the North East have seen the smallest reduction, down £38 to £853, as stronger local price growth has offset some of the benefit from lower rates.

Elsewhere, average monthly payments now stand at £2,000 in the South East (down £195 year-on-year), £1,784 in the East of England (down £149), and £1,599 in the South West (down £135). In Scotland, the average monthly payment is £809 (down £51), while in Wales it is £1,117 (down £109).

The average 2-year fixed remortgage rate in January was 4.32%, down from 5.14% a year ago. Meanwhile, the average 2-year fixed buy-to-let rate, based on a 25% deposit and no fee, was 4.84%, compared with 5.51% last year.

CONFIDENCE BOOST

Rightmove’s monthly confidence tracker shows that net confidence among buyers and sellers in January returned to its highest level since September 2025.

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.

“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.”