First-time buyer mortgage costs soar 41% in a decade
First-time buyers are facing monthly mortgage repayments 41% higher than a decade ago, with new research from Yopa revealing that, while house prices and deposit requirements have remained broadly unchanged in real terms, rising mortgage rates have significantly increased the monthly cost of getting onto the property ladder.
The full-service estate agency analysed average UK house prices, deposit requirements and mortgage repayments in 2006, 2016 and 2026, adjusting historical costs for inflation to establish how the financial commitment of purchasing a home has changed over the last two decades.
Mortgage repayments 41% higher than a decade ago
In 2016, the average UK property cost £195,035, equivalent to £279,293 in today’s money. By comparison, the average property price in 2026 stands at £273,037, making it £6,256 cheaper in real terms than a decade ago.
The deposit required to purchase an average property with a 75% loan-to-value mortgage has followed a similar pattern.
In 2016, buyers needed a 25% deposit of £48,759, equivalent to £69,823 today. In 2026, the same deposit requirement stands at £68,259, some £1,564 less in real terms.
However, while house prices and deposit requirements have remained broadly consistent, the difference in monthly mortgage repayments is far more pronounced.
In 2016, the average two-year fixed mortgage rate at 75% loan-to-value stood at just 1.72%, resulting in an estimated monthly repayment of £600 over a 25-year term, equivalent to £860 in today’s money.
Fast forward to 2026 and the average mortgage rate stands at 5.13%, with monthly repayments estimated at £1,213.
This means that, despite the average property costing slightly less in real terms, today’s first-time buyers face monthly mortgage repayments that are £353, or 41%, higher than a decade ago.
Mortgage costs return to levels comparable to 2006
Yopa’s research also reveals that today’s mortgage costs are remarkably similar to those faced by buyers 20 years ago.
In 2006, the average UK property cost £155,230, equivalent to £279,939 in today’s money, while the 25% deposit required stood at £38,807, or £69,985 when adjusted for inflation.
The average two-year fixed mortgage rate was 4.95%, resulting in an estimated monthly repayment of £677, equivalent to £1,221 today.
This means that the £1,213 monthly repayment facing buyers in 2026 is just £8 lower than the inflation-adjusted cost in 2006, highlighting how the improvements in mortgage affordability seen a decade ago have since been reversed.
Verona Frankish, CEO of Yopa, commented:
“House prices have long been the focus of the affordability debate, but our research demonstrates just how significant an impact mortgage rates have on the actual cost of getting onto the property ladder.
Despite the average property price and deposit requirement remaining broadly unchanged in real terms over the last decade, first-time buyers are now facing monthly mortgage repayments that are 41% higher due to increasing mortgage rates. That’s a substantial additional financial commitment for those looking to purchase their first home.
The era of exceptionally low mortgage rates provided a considerable boost to affordability, but those conditions are now firmly behind us. In fact, today’s buyers face mortgage costs almost identical to those seen 20 years ago, demonstrating just how much the pendulum has swung back in the opposite direction.”
You May Also Enjoy
London’s most balanced rental markets revealed
First-time buyer mortgage costs soar 41% in a decade
Richmond upon Thames crowned 2026’s happiest place to live
What the sector must do differently to engage with young people
Persistent decline to give way to recovery in 2027
