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Oh dear! Mortgage payments see second largest increase

Not the best news for the property sector, as the latest research by Revolution Brokers, shows that the monthly cost of repaying a mortgage has experienced the second largest annual spike, with only energy bills increasing at a greater rate according to the study results.

Revolution Brokers looked at the annual increase in a number of household costs, from energy bills to mortgage payments, water and sewage as well as food and drink, to reveal which area is the culprit for putting the most pressure on our household finances.

Criminal increases


The soaring price of energy continues to put the greatest strain on UK households, according to the research. In 2021, the average household was paying an annual bill of £1,277, however, this has since climbed to £1,971 – an increase of 54% (£694 per year).

While the initial cost of climbing the ladder via a 15% mortgage deposit has increased by just 8% year-on-year, the financial commitment of borrowing to buy has seen the second largest increase.

As short as a year ago, the average buyer purchasing with a standard variable rate mortgage with an 85% loan-to-value was paying £13,921 per year. Since December 2021, with the interest rates climbing, this annual cost now sits at £16,629 per year has increased by 19%, the second largest increase of all household outgoings.

Not only is the average mortgage repayment by far the largest financial commitment, but homebuyers are also now paying £2,709 a year more than they were in 2021.

Relief in the rental sector

In contrast, those living within the rental sector have seen the annual cost of renting increase by just 9%, up from £12,636 per year to £13,716.

The food shop has seen comes in third for the largest increase, with the average household now forking out 10% (£321) more per year on food and non-alcoholic drinks.

Water and sewage have experienced the smallest change, only increasing by 2% annually, which is a climb that equates to just £7 more per year, per household.

Founding director of Revolution Brokers, Almas Uddin, commented: “Much of the focus around the current cost of living crisis has been on the soaring cost of our energy bills, and for good reason. Not only have they seen by far the most drastic increase, the intended energy cap increase due next month will see this cost climb even higher.”

“However, it’s our mortgage commitment that remains by far the most substantial household outgoing and this cost has also been increasing since the first base rate hike back in December of last year,” Uddin concludes.  

Household outgoing 2021 2022 Change £ Change %
    Average Annual Household Energy Bill £1,277 £1,971 £694 54%
    Average Annual Mortgage Repayment £13,921 £16,629 £2,709 19%
    Average Annual Household Food & Drink Spend £3,280 £3,601 £321 10%
    Average Annual Rent (PRS Sector) £12,636 £13,716 £1,080 9%
    Average Mortgage Deposit at 15% £40,415 £43,818 £3,403 8%
    Average Annual Household Water & Sewerage Bill £412 £419 £7 2%

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