Monthly mortgage payments have dropped over the last decade as a portion of income. The average payment now is currently 31% of monthly income as compared to 43% of monthly income before. This is despite the recent increase in home values. One of the contributing factors to this fact is wage growth, not just mortgage prices. As average wages have seen a large increase, this as made buying a home more affordable in an individual’s budget.
Key Takeaways:
- It is encouraging to note that monthly mortgage payments as a proportion of income has dropped. It is now 31 percent from 43 percent a decade ago.
- A mortgage broker with Private Finance says that mortgagers are now saving on average about 104 pounds a month when compared to 2008.
- Due to the prevalence of falling interest rates recently, the experts estimate that once a buyer have made the upfront purchase for their home, cost of ownership falls.
“Wage growth also has a role to play; while monthly mortgage repayments have increased by 88 per cent from £373 in 1998 to £700 in 2018 – this increase has been offset by the rise in average earnings.”