Average outstanding UK mortgage is £100,000

Homeowners in the UK have an average balance of almost £100,000 outstanding on their mortgage, according to exclusive new research.

The findings, from the Moneywise Consumer Opinion Survey of 20,000 people, reveal that the average outstanding home loan stands at £95,883.

The findings also indicate that 68% of people are happy with their existing mortgage interest rate, while 13.4% will be re-mortgaging in the next year – but 1 in 5 people (18.5%) did not know if they would need to remortgage or not in the next 12 months.

The average mortgage balance offers a glimpse into the size of loan British households are trying to service at present – a time when inflation is easily outstripping wage growth.

The latest labour market figures from the Office for National Statistics indicate that annual wage growth stood at 0.8% in the first quarter of 2013 compared to the same period of 2012, while inflation is currently 2.8%. This means people's real take-home pay is being seriously eroded by the cost of living.

Earlier this week it emerged that an increasing number of older people are facing homelessness as they struggle with rising rent and mortgage arrears, according to a leading charity.

Stepchange Debt Charity said it was particularly concerned at the number of older people seeking its help who still have mortgages outstanding. The average mortgage arrears for over 60s increased from £3,563 in 2009 to £3,998 last year – that would represent just under 5% of Moneywise readers' outstanding mortgage balance.

If mortgage rates were to rise, debt charities warn that greater numbers of cash-strapped households with outstanding mortgage balances will fall into arrears.

Get help finding the best mortgage for you


David Hollingworth, mortgage expert at London & Country, says that with an average standard variable rate of 4.75% on a repayment mortgage of £95,883 over 20 years, monthly repayments would be £619.62. These would rise by £54 to £673.18 if the SVR were to increase by 1 percentage point. But if the SVR rose by 2 percentage points, the mortgage repayments would rise by almost £110 to £729.06 a month.

To put that in context, recent research from Halifax showed that half of all households (46%) would struggle if they had to find another £99 a month in their budget; one in four (26%) would be stretched by an increase of £49; while 13% said finding just £24 a month more in their budget would leave them stretched.

The results of the Consumer Opinion Survey have been used to crunch the shortlist for the Moneywise Customer Service Awards 2013 – at which Britain's most trusted mortgage provider will be announced on June 13th. The shortlist can be viewed here.