According to analysis by research consultancy Capital Economics, the monthly cost of paying the interest on a new mortgage in the UK is now 62% lower than renting, as the average monthly rent for a property is £859, compared with the £323 average monthly interest on a new mortgage. In comparison, between 2010 and 2018, the average interest on a mortgage was 55% lower than the average rent, while paying the interest on a mortgage in the 2000s was only 27% cheaper than paying the rent. The report said that while mortgage payments have fluctuated broadly in line with rents over the past decade, lower interest rates meant that larger shares of those payments were now being used to pay off the loan capital. In the 1980s and 1990s, about 80 to 90% of payments on a new mortgage covered the interest, a ratio that was down to 50% in the 2010s and 41% last year.
The Times (19/08/2019)