Introduction
As of early 2025, the latest figures reveal important trends in the UK mortgage market. The Money Charity’s March 2025 Money Statistics report – themoneycharity.org.uk – provides a snapshot of mortgage debt, interest rates, affordability, and more. Below, we summarise the key mortgage-related statistics and claims from this report.
Whether you’re a first-time buyer or looking to remortgage, understanding these numbers can help paint a picture of the current landscape. (All figures are for the UK and are as of late 2024 or early 2025.)
UK Mortgage Debt in 2025: Record Highs
Total UK mortgage debt 2025 has reached a record level. According to the Bank of England, outstanding mortgage lending stood at £1,647.3 billion at the end of January 2025 . This is an increase of about £27.8 billion from a year earlier (when it was £1,619.5 billion) . In practical terms, that means the average household with a mortgage now owes roughly £155,263 on their mortgage. This growing mortgage debt reflects rising house prices and sustained borrowing activity over the past year.
Mortgage Interest Rates and Average Repayments in 2025
Mortgage interest costs have climbed as interest rates (UK 2025) remain high. The average mortgage interest rate on outstanding loans was 3.82% at the end of January 2025 . At that rate, the interest portion of an average mortgage repayment comes to about £5,931 per year – roughly £500 per month just in interest. New borrowers are facing even higher rates: for new mortgage loans, the average interest rate was 4.52% . Based on this, a typical first-time buyer would pay around £8,312 in interest over the first year of a new mortgage . These figures illustrate how rising interest rates UK 2025 translate into higher monthly payments for homeowners.
Mortgage Lending Trends and Loan-to-Value Ratios
Mortgage lending activity has been robust. In the last quarter of 2024, banks and building societies lent £68.78 billion in new mortgages (gross lending), which was nearly 30% higher than the same period in the previous year . This surge suggests a busy housing market despite higher rates.
Many borrowers are putting down large deposits. According to the Financial Conduct Authority, 55.9% of new mortgage lending in Q4 2024 was on properties where the loan amounted to 75% or less of the property’s value . In other words, over half of buyers had a deposit of at least 25%. Only about 6.05% of lending was for mortgages exceeding 90% of the property’s value (low-deposit, high loan-to-value loans). Despite sizeable deposits, people are still stretching their incomes to buy homes – 55.8% of mortgage lending involved borrowing at least three times the borrower’s annual income . This highlights a mortgage affordability challenge: more than half of new homebuyers needed a mortgage three or more times their salary to afford a property.
First-Time Buyer Mortgage Stats and Affordability
For those stepping onto the property ladder, the data shows both growth and challenges. The average house price for first-time buyers in Great Britain was £227,026 in January 2025 . That’s an increase of 5.3% compared to a year earlier (and a small 0.1% rise from the previous month) . With prices this high, first-time buyers have to find large deposits. Halifax reports that the typical first-time buyer deposit in 2023 was about 19% of the purchase price, which works out to roughly £43,135 for that average starter home price . Astonishingly, that deposit alone is about 116% of the average UK annual salary . In fact, it’s estimated that it would take about 11 years for the average earner to save up such a deposit, if saving at a typical rate out of their income . These first-time buyer mortgage stats underscore the affordability hurdle: saving for a deposit and affording the monthly payments (especially with ~4.5% interest rates on new loans) are significant challenges for new buyers.
Mortgage Arrears and Repossessions in 2025
While most households keep up with their mortgage payments, a small share are struggling. At the end of 2024, around 92,170 homeowner mortgages were in arrears by at least 2.5% of the outstanding balance (meaning these borrowers had fallen significantly behind on payments) . This figure equals roughly 1.06% of all home loans . The good news is that this number has been edging down – the total number of mortgages in arrears has decreased slightly compared to the previous year – suggesting some improvement in households’ ability to manage debts.
However, repossessions have been picking up after being unusually low during the pandemic. In the last quarter of 2024, 1,030 homes were taken into possession (repossessed) for mortgage debt, up from 670 in the same quarter of 2023 . That works out to about 11 properties repossessed per day across the UK . In England and Wales, courts saw an average of 66 mortgage possession claims (legal cases filed by lenders) per day, and about 12 mortgage possession orders (court orders to repossess) per day in late 2024 . These figures are now climbing back toward pre-pandemic levels. Overall, while the vast majority of mortgage holders are managing, the data shows a noticeable minority facing difficulties – an important reminder of the risks when mortgage affordability (UK) is stretched.
Conclusion
In summary, the mortgage landscape in early 2025 is marked by record-high debt levels and rising costs. Borrowers are dealing with higher interest rates, and many need large deposits and substantial income multiples to purchase a home. First-time buyers, in particular, face steep house prices and lengthy savings times for deposits. On the whole, most people are keeping up with their mortgage repayments, but there is a slight uptick in arrears and repossessions now that pandemic support measures have receded. These key statistics and trends provide valuable insight into the health of the UK housing and mortgage market as we move further into 2025.
The Financial Conduct Authority does not regulate some forms of Buy to Lets. Your property may be repossessed if you do not keep up repayments on your mortgage.
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