The average monthly mortgage payment dropped by £119 in January compared to the same month last year, Rightmove has found.

Its estimates are an indication of how the market has changed rather than an average of what borrowers are actually paying, as many borrowers will be on fixed rates that have not changed over this period.

For its calculations, Rightmove tracks average mortgage rates versus average house prices.

It found the average mortgage payment was £1,592 in January based on the national average asking price for a home of £368,031.

This was down by £119 or 7% compared to a year ago due to falling mortgage rates, despite the 0.5% year-on-year rise in average house prices. 

The average two-year fixed mortgage rate in January was 4.23%, down from 4.99% in January 2025.

However, a monthly jump in property asking prices meant that the average mortgage payment in January was £35 higher than in December 2025.

For first-time buyers, the year-on-year drop in mortgage rates has had a significant impact.

The mortgage payment for a typical first-time buyer fell to £975 per month in January, compared to £1,062 a year earlier.

The average remortgage rate was 4.32% in January, down from 5.14% last year.

The average buy-to-let rate was 4.84%, down from 5.51%.

Rightmove mortgage expert Matt Smith says: “We saw some headline grabbing low mortgage rates being offered by lenders at the end of 2025 and into January, which saw average rates drop to their lowest level since before the mini-Budget. 

“Since then, rates have stabilised and even ticked up marginally in places as the cost of funding mortgages has become more expensive, due to global and domestic economic events.”

Propertymark chief executive Nathan Emerson says: “Many households have endured significantly higher housing costs in recent years due to the cost-of-living crisis, so this level of saving will make a meaningful difference, particularly alongside expectations that energy bills may fall from April.

“This improvement is likely being driven by lenders responding to reductions in the Bank of England base rate, resulting in more competitive and affordable mortgage products coming to market.

“With inflation now at 3% and moving closer to the Bank’s 2% t target, there is cautious optimism that further base rate cuts could follow later this year. “That would help ease cost pressures for millions and could stimulate additional activity across the UK housing market.

“However, while this reduction is encouraging, affordability challenges have not disappeared.”