Buyer delight as average monthly mortgage cost falls

New analysis from Rightmove reveals that the national average monthly mortgage payment was £1,592 in January, £119 lower than at the same time last year.

The analysis uses daily mortgage rate data and property asking price data to calculate residential mortgage payments.

Mortgage payments are based on average two-year fixed rates with a circa £999 fee and based on 95% of the mortgage market to exclude specialist lending.

The calculations assume buyers have a 20% deposit and spread the cost of their mortgage over 25 years.

What’s the latest for mortgage payments?

The national average monthly mortgage payment decreased by £119 (-7%) year-on-year for new buyers in January due to a combination of average mortgage rate drops and slower house price growth.

The average two-year fixed mortgage rate was 4.23% in January, down from 4.99% in January 2025.

Meanwhile, national average asking prices were only up by 0.5% year-on-year, standing at £368,031 in January.

While buyers are looking at notable savings compared to last year due to mortgage rate drops, a big monthly increase in property prices this January means that buyers face paying a little more on a new mortgage than they would have in December.

The national average monthly mortgage payment is £35 more than it was in December 2025 when the national average asking price was £358,138.

What’s the situation for first-time buyers?

The average asking price for a typical first-time buyer home was £225,544 in January, and the average first-time buyer monthly mortgage payment was £975, down from £1,062 at this time last year.

A 20% deposit would equate to £45,109 based on January’s average asking price.

What are the regional differences?

London buyers have seen the biggest year-on-year drops in monthly mortgage payments of £207.

This is because homes are more expensive in London, making proportional mortgage rate drops result in higher cash savings.

New buyers in the North East will see the least benefit from lower mortgage rates compared to purchasing last year.

This is because homes are cheapest in the North East, but also because asking prices have risen faster here, with higher prices offsetting some of the savings of lower mortgage rates.

What are other types of mortgage rate looking like?

Those looking to remortgage or take out a buy-to-let mortgage will see slightly different rates to those buying with a lender for the first time.

The average remortgage rate in January is 4.32%, down from 5.14% last year. Meanwhile, the average buy-to-let mortgage rate is 4.84%, down from 5.51% last year.

The average remortgage rate is based on a 2-year fixed rate with a circa £999 fee, and the average buy-to-let mortgage rate is based on a 2-year fixed rate with a 25% deposit and no fee.

What else is helping the market?

Rightmove’s monthly confidence tracker measures the sentiments of home-owners, renters, prospective first-time buyers and landlords towards the market.

It shows that net confidence among buyers and sellers in January returned to its highest level since September 2025.

Source: Estate Agent Today, February 2026