Mortgage borrowing and remortgage approvals fall in October 2025

Net borrowing of mortgage debt by individuals fell to £4.3 billion in October 2025, down from £5.2 billion in September, according to the Bank of England's monthly Money and Credit release published on 1 December 2025¹. Net mortgage approvals for house purchase, which the Bank describes as an indicator of future borrowing, decreased by 600 to 65,000 over the month¹.

Approvals for remortgaging, which capture only remortgaging with a different lender, fell by 3,600 to 33,100, the lowest since February 2025, when the figure was 32,900¹. Gross mortgage lending was slightly lower at £24.5 billion, down from £24.8 billion in September, while gross repayments rose by £1.5 billion to £22.1 billion¹. The annual growth rate for net mortgage lending was unchanged at 3.2%, the highest since January 2023¹.

The effective interest rate, meaning the actual interest paid, on newly drawn mortgages was 4.17% in October, down from 4.19% in September and the lowest since January 2023, continuing a downward trend observed since March 2025¹. The rate on the outstanding stock of mortgages was unchanged for the third consecutive month at 3.89%¹.

Source: Bank of England Money and Credit, October 2025¹

Consumer credit told a similar story. Net borrowing of consumer credit by individuals decreased for the second consecutive month, to £1.1 billion in October from £1.4 billion in September¹. Within that, net borrowing through credit cards slipped to £0.6 billion from £0.7 billion, and net borrowing through other forms of consumer credit, such as car dealership finance and personal loans, fell to £0.5 billion from £0.7 billion¹. The annual growth rate for all consumer credit was unchanged at 7.2%¹.

Households deposited an additional £6.8 billion with banks and building societies in October, following net deposits of £8.2 billion in September¹. This included £5.5 billion into interest-bearing sight deposit accounts, £4.2 billion into ISAs and £0.3 billion into interest-bearing time deposit accounts, partly offset by withdrawals of £1.8 billion from non-interest-bearing accounts¹.

On the business side, private non-financial corporations repaid, on net, £4.8 billion of finance in October, the highest level of net repayments since October 2023¹.

Why it matters for households

Mortgage approvals are a forward-looking indicator: the 65,000 house purchase approvals recorded in October point to the volume of completed lending in the months that follow, and the fall in remortgage approvals to 33,100 suggests fewer households switched lender in that month¹. The rate on newly drawn mortgages, at 4.17%, is the lowest since January 2023, while the rate on the existing stock of mortgages, at 3.89%, has been unchanged for three months¹. That gap means borrowers moving onto new deals, or taking out new loans, are generally facing a higher rate than the average across all outstanding mortgages.

For unsecured borrowing, the effective rate on interest-charging credit cards rose to 21.54% in October from 21.44%, and the rate on new personal loans increased for the third consecutive month to 8.39%¹. The rate on interest-charging overdrafts fell by 8 basis points to 21.78%¹. Savers saw the effective rate on new time deposits rise slightly to 3.84%, while the rate on the outstanding stock of time deposits fell by 5 basis points to 3.37% and the rate on stock sight deposits fell to 1.77%¹.

What happens next

The Bank of England's next Money and Credit release is scheduled for 5 January 2026¹.