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Tag: mortgage borrowing

  • Mortgage Borrowing Rises to £6.2bn in March 2026

    Mortgage Borrowing Rises to £6.2bn in March 2026

    Mortgage borrowing in the UK saw a significant increase in March 2026, with net mortgage borrowing rising to £6.2 billion, up 19% from £5.2 billion in February. This surge surpasses the six-month average of £4.9 billion, indicating a robust demand for mortgages despite fluctuating economic conditions.

    Key Statistics from March 2026

    According to the latest money and credit statistics published by the Bank of England, secured gross lending also saw an uptick, reaching £28.7 billion in March, compared to £24 billion in February. This figure exceeds the six-month average of £23.9 billion, reflecting a healthy lending environment. However, the annual growth rate for net mortgage lending has slightly decreased to 3% in March, down from 3.4% in February.

    Increased Mortgage Approvals

    Mortgage approvals, which serve as an indicator of future borrowing, also rose in March. Net mortgage approvals for house purchases increased to 63,500, up from 62,700 in February, and above the six-month average of approximately 63,200. Additionally, approvals for remortgaging with different lenders climbed to 51,300 in March, a notable rise from 41,200 in February. This trend suggests that homeowners are actively seeking to secure better mortgage deals as interest rates fluctuate.

    Interest Rates on Mortgages

    The effective interest rate paid on newly drawn mortgages decreased to 4.03% in March, down from 4.10% in February. Furthermore, the rate on the outstanding stock of mortgages also fell to 3.93%, down from 3.95% in the previous month. Mark Harris, chief executive of mortgage broker SPF Private Clients, commented on the resilience of the housing market, attributing the increase in approvals to a recovering economic outlook following the recent Budget announcement.

    This reduction in interest rates may encourage more potential homeowners to enter the market or for existing homeowners to remortgage, particularly as the UK base rate stands at 3.75% as of April 2026.

    For example, a homeowner with a £200,000 mortgage could see significant savings by remortgaging at the current effective rate of 4.03% compared to previous rates, potentially lowering their monthly payments and overall interest costs.

    Conclusion

    The increase in mortgage borrowing and approvals, coupled with declining interest rates, indicates a positive shift in the UK housing market. Homebuyers and homeowners alike may benefit from these developments as they navigate their mortgage options.

    FAQs

    • What is the current effective interest rate for new mortgages? The effective interest rate for newly drawn mortgages decreased to 4.03% in March 2026.
    • How much did mortgage borrowing increase in March 2026? Net mortgage borrowing rose to £6.2 billion in March, a 19% increase from February.

  • UK Mortgage Borrowing Rises to £6.2bn in March 2026: What it Means for Borrowers

    UK Mortgage Borrowing Rises to £6.2bn in March 2026: What it Means for Borrowers

    As of May 2026, UK mortgage borrowing has seen a significant increase, rising 19% to £6.2 billion in March, up from £5.2 billion in February, according to the latest money and credit statistics from the Bank of England. This article will break down what these figures mean for first-time buyers, remortgagers, and landlords.

    Impact on First-Time Buyers

    Increased Mortgage Approvals

    Net mortgage approvals for house purchases rose to 63,500 in March, from 62,700 in February. This is above the six-month average of 63,200, indicating a higher likelihood of mortgage approval for first-time buyers.

    Lower Interest Rates and Monthly Payments

    The ‘effective’ interest rate on newly drawn mortgages decreased to 4.03% in March, from 4.10% in February. For a first-time buyer with a £250,000 repayment mortgage at 90% LTV, this rate cut reduces monthly payments from £1,207 to £1,179 — a saving of £28 per month or £336 per year.

    Impact on Remortgagers

    Increased Approvals for Remortgaging

    Approvals for remortgaging (which only capture remortgaging with a different lender) also increased, to 51,300 in March from 41,200 in February. This indicates a favourable environment for those considering a remortgage.

    Decreased Interest Rates and Monthly Payments

    The rate on the outstanding stock of mortgages decreased to 3.93% in March, down from 3.95% in February. A homeowner with a £200,000 repayment mortgage at 75% LTV would see their monthly cost drop from £948 to £937.

    Impact on Landlords

    Decreased Interest Rates and Monthly Payments

    The rate on the outstanding stock of mortgages decreased to 3.93% in March, down from 3.95% in February. A landlord with a £200,000 interest-only BTL mortgage would see their monthly cost drop from £650 to £643.

    Market Context

    The current increase in borrowing is above the previous six-month average of £4.9 billion and significantly higher than the £3.4 billion recorded in March 2025. The current base rate is 3.75%, up from 3.5% a year ago. The annual growth rate for net mortgage lending, however, decreased to 3% in March, from 3.4% in February, indicating a slowing pace in the growth of mortgage lending.

    Frequently Asked Questions

    What does the increase in mortgage borrowing mean?

    The increase in mortgage borrowing indicates a more active housing market, with more people taking out mortgages. This is often associated with increased house buying and selling activity.

    How does the decrease in interest rates affect my mortgage payments?

    A decrease in interest rates means lower mortgage payments. For example, a 0.07% decrease in interest rates would reduce monthly payments on a £250,000 mortgage from £1,207 to £1,179, saving £28 per month.

    What does the increase in remortgage approvals mean?

    An increase in remortgage approvals indicates that more people are successfully switching to a new mortgage deal, often to take advantage of lower interest rates or better terms. In March, remortgage approvals increased to 51,300 from 41,200 in February.

    How does the current base rate affect my mortgage?

    The current base rate of 3.75% affects the interest rates offered by lenders. A higher base rate generally means higher interest rates, which can increase mortgage payments. However, the ‘effective’ interest rate on new mortgages actually decreased to 4.03% in March.