TL;DR
- •UK mortgage borrowing rose 19% to £6.2 billion in March 2026, with increased approvals for both house purchases and remortgages, and decreased interest rates..
- •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.
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.
About David Sampson
David Sampson writes about the UK mortgage market for Mortgage118, covering specialist lending, market trends, and practical advice for borrowers. All content is reviewed for accuracy against FCA guidelines and current market data.