Commentary on Mortgage lending statistics Q3 2025

The value of gross mortgage advances increased by 36.9% from the previous quarter to £80.4 billion, the largest increase in new advances since 2020 Q3, and was 22.7% higher than a year earlier (Table A and Chart 1).

The value of new mortgage commitments (lending agreed to be advanced in the coming months) increased by 1.6% from the previous quarter to £79.4 billion, the highest since 2022 Q3, and was 20.3% higher than a year earlier. 

The share of gross mortgage advances with interest rates less than 2% above Bank Rate (including at or below Bank Rate) increased by 0.4pp from the previous quarter to 95.5%, but remained 1.4pp lower than a year earlier (Chart 2).

The share of advances with interest rates between 2% and up to 3% above Bank Rate decreased by 0.1pp from the previous quarter to 2.7%, but remained 1.1pp higher than a year earlier.

The share of advances with interest rates 3% or more above Bank Rate decreased by 0.2pp from the previous quarter to 1.8%, the first decrease since 2024 Q2, but remained 0.3pp higher than a year earlier.

The share of gross mortgage advances with LTV ratios exceeding 90% increased by 0.3pp from the previous quarter to 7.4%, the highest share since 2008 Q2, and was 0.8pp higher than a year earlier (Chart 3).

Within this, the share of mortgages advanced with LTVs over 95% has stayed the same as the previous quarter at 0.5%, and was 0.2pp higher than a year earlier.

The share of gross mortgage advances with LTV ratios exceeding 75% increased by 1.2pp from the previous quarter to 44.6%. This was the same as a year earlier.

Note on Chart 4: Gross advances by income multiple: The ‘Other’ category is used when the loan assessment is based, only partly or not at all, on one or more persons’ incomes. Further details can be found in the FCA Handbook[2].

The proportion of lending to borrowers with a high LTI ratio increased by 3.3pp from the previous quarter to 44.7%, the largest increase since 2020 Q3, but remained 0.6pp lower than a year earlier (Chart 4). Borrowers with high LTI ratios are defined here as:

• Borrowers with a single income and an LTI ratio of 4 or above. This proportion increased by 0.8pp from the previous quarter to 10.9%, the largest increase since 2024 Q3, and was 1.4pp higher than a year earlier.
• Borrowers with a joint income and an LTI ratio of 3 or above. This proportion increased by 2.4pp from the previous quarter to 33.8%, the largest increase since 2020 Q3, but remained 2.0pp lower than a year earlier.

The share of gross mortgage advances for buy-to-let purposes (covering house purchase, remortgage and further advance) decreased by 1.0pp from the previous quarter to 8.2%, the largest decrease since 2024 Q3, but remained 0.2pp higher than a year earlier (Chart 5). The share of advances to owner occupiers was 91.8%.

Of the 91.8% of advances for owner occupiers, the share of gross advances for remortgages for owner occupation decreased by 0.4pp from the previous quarter to 28.6%, but remained 5.8pp higher than a year earlier. The share of gross mortgage advances for house purchase for owner occupation increased by 2.5pp from the previous quarter to 58.6%, but remained 5.8pp lower than a year earlier. Further advances and other mortgages (including lifetime mortgages) decreased by 1.1pp from the previous quarter to 4.7%, the largest decrease since 2016 Q3, and was 0.1pp lower than a year earlier. 

Of the 58.6% of advances for house purchases by owner occupiers, lending to first time buyers has stayed the same as the previous quarter at 27.4%, but remained 1.9pp lower than a year earlier. The share advanced to home movers increased by 2.5pp from the previous quarter to 31.2%, but remained 3.9pp lower than a year earlier. 

The value of outstanding mortgage balances with arrears decreased by 2.9% from the previous quarter to £20.6 billion, and was 5.8% lower than a year earlier (Chart 6). Arrears are defined as the borrower failing to make contractual payments where the balance owed is equivalent to at least 1.5% of the outstanding mortgage balance or where the property is in possession.

Of the £20.6 billion of outstanding mortgage balances with arrears, the value of non-regulated mortgages (including buy-to-let loans and other residential lending to individuals where the property is not for use by the borrower or qualifying dependents) decreased by 4.0% from the previous quarter to £4.7 billion, and was 6.7% lower than a year earlier.

The proportion of the total mortgage loan balances with arrears, relative to all outstanding mortgage balances, has stayed the same as the previous quarter at 1.2%, and was 0.1pp lower than a year earlier.

The proportion of total outstanding balances with arrears that are new arrears cases decreased by 0.1pp from the previous quarter to 8.8%, and was 0.9pp lower than a year earlier.