According to new research by online brokerage service, Revolution Brokers, the energy price cap increase set to begin in October will total nearly a third of annual mortgage in energy and water bills. 

The analysis of utilities bills has changed since 2019 and what this cost equates to as a proportion of our annual mortgage payments shows a drastic adjustment in costs.

The annual mortgage payments are based on a three year fixed mortgage at a 75% loan to value. 

2019 costs vs 2022 costs

Revolution Brokers reveal that in 2019, the average homebuyer was paying £8,629 per year for a mortgage based on the average house price of £233,366 and an average mortgage rate of 1.73%.

During this time the average household also paid £1,593 for energy and water each year, this meant that their yearly utility bills totalled 18.5% of their annual mortgage cost. 

In 2020, £1,452 was spent per year on utilities. This means that this cost accounted for 16.2% of the average annual mortgage repayment of £8,940. 

In 2021 this cost climbed to £1,689 per year, equating to 18.2% of the annual cost of a mortgage (£9,265).

Currently, the average homeowners is repaying £12,643 per year in mortgage costs and £2,390 per year in utilities, meaning that running a property now accounts for 18.9% of the average annual mortgage repayment. 

October of this year utility costs are set to climb to  £3,549. This would see annual energy and water costs increase to the equivalent of 28.1% of the annual cost of a mortgage. 

Founding director of Revolution Brokers, Almas Uddin, commented: “The current cost of living crisis is a very real concern for many households and it’s easy to see why when energy bills are increasing at such an extraordinary pace.

Climbing the property ladder is a hard task and our monthly mortgage payments are by far the most substantial of our household outgoings. So for the average household to be paying the equivalent of almost a third of this cost in utility bills by October, really does highlight the bleak outlook for many and just how out of control the current situation is.”