Halifax bank has revealed that the decreasing cost of mortgage payments as a result of low interest rates were keeping the cost of living down, although it’s still at a three year high because of other factors.
Petrol prices are at a record high, as are gas and electricity prices and with inflation above 4% this doesn’t show any sign of changing anytime soon.
Halifax figures for March this year showed that the 12 month cost of living for an average family was £9,083, compared to £8,956 at the same point last year. This 1.4% increase was despite a decrease in mortgage costs.
Whilst the base rate has been low for the last two years, many families have had to wait until their existing fixed rate mortgage was finished, before they could take advantage of a new lower rate one.
Families without a mortgage are the ones seeing the biggest increase in costs, as they have no lower repayment costs to offset the huge increase in energy and food prices.
Suren Thiru, housing economist from Halifax added, “The current strain on household finances is particularly concerning at a time when earnings growth remains weak.”