Millennials will be the first generation of homeowners to see mortgage repayments rise in the second half of their loan, according to Hamptons’ Generational Affordability Index
During the first half of their mortgage term, Millennials have paid a similar amount in mortgage repayments to the two generations before them.
In 2024 prices, the average Millennial paid £863 per month for their mortgage during the five years after they bought. This compares to £923 a month for the average Generation X first-time buyer and £775 for a Baby Boomer
However, higher interest rates today mean Millennials will be the first generation of homeowners to see their mortgage repayments rise during the second half of their 25-year mortgage term.
These higher rates mean the average Millennial still has over half (61%) of their projected total mortgage repayments to make. By the same point, the average Baby Boomer had 41% left to pay and Generation X had 40%. .
As Generation Z starts to buy, today’s higher rates mean they face mortgage repayments roughly twice those paid by Millennials when they first bought (£1,739pcm v £863pcm) .
Commenting on the latest data, Hamptons head of research Aneisha Beveridge said:
“Millennials started buying their first homes in the shadow of the 2007 crash, back when house prices were on their way up and mortgage rates on their way down. In the early days, this meant that despite much higher house prices, in real terms, Millennials’ mortgage repayments have looked remarkably similar to the previous two generations.
She added: “However, the shift towards higher mortgage rates in recent years has changed everything. Unlike previous generations who generally benefitted from interest rates drifting down, making repayments more affordable, Millennials have been uniquely squeezed. They’ve taken on lots of debt at record low rates, only to see those rates rise. And with rates set to stay higher for longer, most Millennials are likely to see their mortgage payments increase as they enter the second half of their mortgage term.”
