The UK cities where buying a home with a 5% deposit could be less expensive than renting
New study reveals where it’s cheaper to buy homes than rent
- Analysis by Lloyds bank indicates that buying a home with a mortgage could be more affordable than renting for first-time buyers in many major British cities.
- The study compared typical monthly rental costs with potential mortgage payments, based on a 5 per cent deposit, a 4.78 per cent fixed interest rate for five years, and a 30-year repayment term, excluding London.
- In Glasgow, mortgage payments were found to be approximately 32 per cent cheaper than rent, potentially saving buyers £396 per month, while Newcastle offered savings of 20 per cent or £217 monthly.
- The typical 5 per cent deposit required could be around £11,412, based on an average first-time buyer property price of £228,233, with some cities needing deposits as low as £8,600.
- Amanda Bryden from Lloyds highlighted that low-deposit mortgages could help people move from renting to owning sooner, advising buyers to consider other upfront costs and the long-term benefit of building equity.