For many people, mortgage payments are the most significant cost to be borne out of their finances each month. But according to a new report by the Family and Childcare Trust this is no longer the case. Indeed, full time childcare is estimated to be around £11,700 every year. This applies to a family with a child of two and a child of five. The report compares this to the average mortgage payment per year in the UK which is significantly less, at £7,207.

Does this say more about low interest rates or expensive childcare?

In all honesty it probably says a little about both. The report also revealed it would cost around £7,549 a year to get part time nursery care for one child and after school care in a club for another child. This still comes out as more expensive than the average UK mortgage payments indicated above.

Of course these figures work on averages so there will be differences in individual situations. A lot will depend on area and the specific situation and place the child goes into. However, it is still surprising to see that mortgages could be cheaper in many cases than childcare.

Low interest rates are also contributing to the comparison

Every mortgage payer will know interest rates have been incredibly low over the past few years. While there is no immediate indication this will change, there is talk of the base rate increasing either this year or next. If this occurs the gap between the cost of mortgage payments and childcare could begin to close.

This will not come as good news for anyone who has either a mortgage or childcare to manage – or both. Even though mortgage payments have been lower in recent years, they have not been any easier to pay. The strain on household finances has never been more pronounced than it has been recently, and this looks set to continue for the foreseeable future. If interest rates do increase this will only become more pronounced.

There is much controversy over the issue of childcare and costs, just as there is over the forthcoming changes that will see it become more challenging to get a mortgage in the first place. It seems the budgets of many ordinary families are being attacked from all sides.

It will be interesting to review these figures once the base rate has been increased and the amount being paid for the average mortgage each year has increased. However since costs are rising on all sides, perhaps it is not just the mortgage payments people will continue to struggle with.

The issue of rising childcare costs does tie in with the challenge many people face not just of getting on the housing ladder in the first place, but of moving on to the second rung of the ladder. For many families, the idea of moving into a larger and more expensive property is still but a dream.

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