The phone-based whole of market mortgage broker looked at looked at the cost of buying — taking into account full mortgage repayments and an interest-only plans – and compared this to current average private sector rent of £1,143 a month. 

It says the average homebuyer looking to buy with a variable rate mortgage at a 75% loan to value and an average rate of 4.45%, the cost of a full mortgage repayment comes in at £1,223 per month, marginally more than the cost of renting.   

However, those who are only making interest only payments on their mortgage each month are currently paying an average of £829 per month – 27.5% less than the current cost of renting.   

A homebuyer opting for a three and two-year fixed-rate product would face a monthly repayment of £1,075 and £1,098, respectively. This means that even when repaying a mortgage in full, it still comes in as a more affordable option versus renting at £1,143 a month, says the study. 

For those repaying their mortgage on an interest-only basis, a three-year fixed-rate deal would see them paying £604 a month, while a two-year fixed-rate offer climbs to £641 per month. Again, this is 47.1% and 43.9% lower than the average cost of renting in the private market.  

But the broker asks with the average mortgage rates at over 6%, “could renting soon become the better option?” 

The average rate for a two-year fix rose 31 basis points, to 6.47%, while the average rate for a five-year fix grew by 22 basis points, to 6.29%, according to Moneyfacts last Friday. Average two-year and five-year fixes were under 3% last December.    

The broker says a 75% LTV mortgage at an average mortgage rate of 6% would amount to a £1,412 monthly repayment. However, the monthly cost of repaying this mortgage on an interest only basis would hit £1,095 per month, still 4.2% less than the average cost of renting. 

Revolution Brokers founding director Almas Uddin says: “The fact that it still works out cheaper to repay a mortgage on an interest only basis versus the cost of renting, probably says more about the inflated state of the private rental market than it does current mortgage affordability.   

“Of course, while the scenario of an interest only mortgage payment versus paying rent is a similar one, the cost of securing a rental property via a rental deposit is a far easier task financially when compared to the cost of a mortgage deposit.   

“However, for those that can manage to overcome this initial hurdle, it remains far more worthwhile to buy versus renting, even in current market conditions.”