It’s likely that buying a house will be one of the most expensive things you ever do. And for most people who want to buy a house, getting a mortgage is necessary. But how much is the average mortgage in the UK? Let’s look at the numbers and see what affects mortgage amounts.
Average Mortgage Values
UK Finance says that the average mortgage value in the last quarter of 202024 was £2,320,442. This was a 2% rise from the previous quarter.
From that time to the next, over 335,962 mortgages were taken out on homes. The number and amount of mortgages being taken out are both going up, though they are still below what they were before the pandemic.
In the second quarter of 2024, the average mortgage value was £185,565 And it was £195,788 in Q4 2022, when the pandemic was at its worst. The values of mortgages have stayed pretty steady over the last two years.
Factors Impacting Mortgage Amounts
Several key factors determine the size of a mortgage you can qualify for:
House Prices
Not surprisingly, the most significant factor is the price of the property you want to buy. With UK house prices remaining high, mortgage values have also stayed elevated.
In January 2025, the average house price in the UK reached £268,548. That’s an increase of over 4% from the prior year. Greater London sees even higher prices nearing £530,000 on average.
Deposits
Most lenders require a deposit of at least 5% of the property’s value. But the more you can put down as a deposit, the lower your mortgage amount will be.
Having at least a 20% deposit also often secures you a better interest rate. But saving that much is difficult especially for first-time buyers.
Salary and Debt
Lenders assess your income, existing debts, and credit score to determine the maximum they’ll loan you. The goal is to ensure your total debt payments don’t exceed 40-50% of your income.
Higher salaries and lower debts increase the amount you can safely borrow. But rising costs of living make building savings tough.
Interest Rates
Higher interest rates mean higher monthly payments for a given mortgage amount. So as rates rise, lenders may reduce loan amounts to keep payments affordable.
Variable mortgage rates have climbed over 5% due to base rate hikes aiming to control inflation. So lenders have tightened lending criteria.
Loan-to-Value (LTV) Ratio
Your LTV ratio compares the mortgage amount to the property’s value. Most lenders cap LTVs at 85-95% depending on the mortgage type.
But exceeding a 75% LTV typically triggers higher interest rates or stricter eligibility standards. So lower LTVs increase your borrowing power.
Average First-Time Buyer Mortgage
First-time buyers often take out smaller mortgages given their limited savings for a deposit. Per UK Finance, the average first-time buyer mortgage amount was £173,104 in Q4 2024.
That’s only 86% of the £200,442 national average mortgage value. First-timers’ lower incomes and credit histories also limit their borrowing capacity.
Government schemes like Help to Buy ISAs and Lifetime ISAs help first-timers build a deposit. Shared ownership programs let you buy a portion of a property then pay rent on the remainder.
But even utilizing these, the average first-time buyer had a loan-to-value ratio of 84% in Q4 2024. Meaning they put down just a 16% deposit on average.
How Much Can I Borrow?
Determining exactly how much you can borrow requires discussing your situation with a mortgage lender or broker. They’ll assess your specific income, debts, credit, desired property, and other factors.
But you can get a general idea using an online mortgage calculator. These ask you to input details like:
- Your desired property price
- Estimated deposit amount
- Approximate household income
- Existing debts and obligations
The calculator then estimates a maximum mortgage amount you may qualify for based on common lending criteria.
This at least provides a ballpark figure to aid your home and mortgage shopping. Just be sure to get pre-approved by a lender as you begin your property search.
Getting the Best Mortgage Deal
While you may qualify for a certain mortgage amount, make sure it aligns with your budget and goals. Just because a lender approves you for a £300,000 loan doesn’t mean you have to take it.
Aim for the lowest loan amount and LTV ratio you’re comfortable with. This saves on interest and keeps payments affordable long-term.
Shopping mortgages from multiple lenders also helps find the best rates for your situation. Online mortgage brokers let you easily compare quotes from their panel of lenders.
Review both fixed and variable rates and different repayment terms. Often a 5-year fixed rate offers a good mix of low initial rates and flexibility.
Buying a home is a major milestone. But carefully planning your mortgage strategy makes the journey smoother. Understanding average UK mortgage amounts and what determines your borrowing power helps set realistic expectations.
With smart planning, research, and professional advice, you can secure the optimal mortgage for your home purchase. So you can enjoy homeownership with peace of mind knowing you’ve found the right loan for your needs and budget.
What is the average mortgage payment in the UK?
If you add up all the current UK mortgage payments and divide them by the number of mortgages, you’ll discover the average monthly payment per person is between £665 and £700.
The average monthly mortgage repayment on a house in the UK is currently £1,441.36.
Average house prices in the UK have continually been on the rise since the global financial crisis of 2007-2009. According to the House Price Index, the average property price is £287,546.
However, the average London house price is far higher than this, at around £527,979.
The North East, with an average house price of about £161,034, is at the other end of the scale.
What is the average mortgage payment, including interest rates, in the UK?
As we mentioned, the current average UK monthly mortgage repayment on a typical house is £1,441.36.
This is for a 25-year mortgage, with a 25% deposit and a 6. 39% interest rate, which is high compared to historic rates.
However, this is not necessarily an indication of your mortgage payment as rates vary considerably from one lender to another, and eligibility for lower interest rates depends on a number of factors.
Here is an overview of the current average UK mortgage payments on a home valued at £287,546, based on a 25-year term but with various interest rates and deposits.
Two-year fixed-rate mortgage:
Deposit: 5%
Average mortgage interest rate: 6.75%
Monthly repayment: £1,887
Two-year fixed-rate mortgage:
Deposit: 25%
Average mortgage interest rate: 5.94%
Monthly repayment: £1,382
Three-year fixed-rate mortgage:
Deposit: 25%
Average mortgage interest rate: 5.78%
Monthly Repayment: £1,361
Standard variable rate mortgage:
Deposit: N/A
Average mortgage interest rate: 7.93%
Monthly repayment: £2,206
Average Mortgage Payment UK
FAQ
What is the average mortgage payment in the UK?
… to data from the Bank of England/NMG household survey, the median monthly payment for all mortgages in London was between £700 and £749 in September 2022 ….
What salary do I need for a 500k mortgage in the UK?
How much money do I need to buy a £500,000 house in the UK? Depending on the lender’s requirements and your personal finances, you’d probably need an annual income of £100,000 to £125,000 to buy a £500,000 house.
How much is a $200,000 mortgage in the UK?
The typical monthly repayment for a £200,000 mortgage is £1,127. This calculation is based on an average interest rate of 4. 64% as of March 2025, over a 25-year term, with total repayments amounting to £338,100. Your exact payment may vary depending on the interest rate, mortgage term, and specific mortgage type.
How much is the mortgage on a 300k house in the UK?
For a 300k mortgage in the UK, you can expect to pay around £1,520 per month if you choose a 30-year term with an interest rate of 4. 5%.