The monthly cost of a new mortgage for the average semi-detached house in the UK increased by 61% in the year to December 2022.

New figures from the Office for National Statistics (ONS) have shown this equated to an increase of £481 to monthly repayments in the space of a year.

The average mortgage rate offered by lenders for a five-year fixed rate loan at a 75% loan-to-value (LTV) ratio was 5.05% in December 2022, according to the Bank of England, which the ONS has based its latest figures on.

This would have resulted in a monthly mortgage repayment of £1,262 if an individual purchased a semi-detached property in the UK at the average December 2022 price of £286,000, with a mortgage term of 25 years.

According to the data, this is worth a £481 (61%) increase in the monthly repayment compared with the corresponding monthly repayment estimate in December 2021. The average equivalent mortgage rate on offer at that time was 1.59% while the average UK semi-detached property price was £258,000.

Purchasing the average detached UK property on the same terms in December 2022 would have resulted in a monthly mortgage repayment of £2,041, a level up by 60.7% on December 2021). For terraced houses, it would have risen by 59.6% to £1,063, and for flats and maisonettes, it would have been up by 54.6% to £1,028.

Personal finance analyst at Hargreaves Lansdown, Sarah Coles, commented: “For new buyers armed with a reasonable deposit, the options are increasingly limited.

“Unless you can find some extra cash up-front, you may well end up having to scale back your ambitions. For remortgagers with a decent chunk of equity in the property, the additional costs may be manageable, but those with large loans and little equity have worryingly few options.”

Monthly repayments on newly issued mortgages have increased significantly over the past year as a result of rising interest rates increasing the cost of borrowing. The latest UK House Price Index from the ONS showed that ouse prices were 9.8% higher in December 2022 compared with the same month in 2021.

Earlier this year, the ONS also reported that more than 1.4 million households in the UK are facing the prospect of interest rate increases when they renew their fixed rate mortgages in 2023.

Head of personal finance at AJ Bell, Laura Suter, commented: “The figures lay bare the nightmare facing the 1.4 million homeowners who need to remortgage this year. Some will be able to stomach the higher costs or extend their term to reduce their monthly repayments, but others will find the increases unaffordable on top of other increases to the cost of living.”

Suter also suggested that while interest rates have risen across the globe, UK homeowners are “far worse off” than those in other developed countries to be able to afford their monthly repayments.

“The expectation is that the number of people missing more than three months of mortgage payments will double this year, as the aftershocks of Liz Truss’ catastrophic mini-Budget are still being felt in the mortgage market,” she added.

“There’s no doubt this will have some knock-on effect on the housing market, with some people shelving plans to upsize their home, while many first-time buyers find their home buying plans are put out of reach by rising costs.”

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