Rate increases mean monthly mortgage bill of £1,000 for average Northern Ireland home

Figures released by one of the UK’s largest lenders, Nationwide, showed at the weekend that the average house price in Northern Ireland is now £183,960.

A first-time buyer with a 10% deposit would require a loan of £165,564 to buy a house at that price.

The mortgage rates offered by lenders have shot up in recent days, with some even choosing to temporarily withdraw from the market entirely to new customers.

The financial turmoil engulfing the UK since markets reacted poorly to the economic policies set out by Chancellor Kwasi Kwarteng last month in the so-called ‘mini budget’ has prompted a response from the Bank of England.

The bank, whose rate influences the mortgage rates available to ordinary customers, quickly indicated it is prepared to hike interest rates higher than previously anticipated.

Yesterday, the News Letter used the figures from Nationwide’s latest house price survey to assess the typical monthly payments for someone buying an average house with a 25-year repayment mortgage and a deposit of either 10% or 15%.

AIB, one of the largest lenders in the Northern Ireland market, had posted a notice on its website stating that it was no longer offering mortgage products to new customers at all amid the financial uncertainty.

The Bank of Ireland, meanwhile, listed rates of 6.29% fixed for two years for customers with a deposit of 15%, and 5.84% fixed for five years. A five-year fixed rate was also listed for 5.94% for those with a 10% deposit.

Danske Bank listed a rate of 5.45% fixed for two years for customers with a 10% deposit on a £183,960 house with monthly repayments of £1,016.17. The lender, formerly Northern Bank, also listed a 4.86% fixed rate for five years with monthly repayments of £954.41.

The Ulster Bank website directs mortgage customers to Nat West, who listed a 3.93% interest rate fixed for five years with an ‘online only’ discount – and monthly payments on an average house with a 10% deposit of £867.52.

Without the discount, the lender listed a five-year fix at 4.02% and monthly payments of £875.74. Santander, meanwhile, listed a five-year fixed rate of 4.64% with a 10% deposit and monthly payments of £933, or 4.74% fixed for two years and payments of £943 per month.

Lloyds listed 5.24% fixed for two years with the same mortgage terms.