Mortgage approvals for house purchase fell in December 2025 while remortgaging approvals rose

The Bank of England reported that net mortgage approvals for house purchase, which it describes as an indicator of future borrowing, fell by 3,100 to 61,000 in December 2025. Approvals for remortgaging, which capture only remortgaging with a different lender, rose by 1,600 to 38,400 over the same month¹.

The figures come from the Bank's monthly Money and Credit release, published on 30 January 2026¹.

Net borrowing of mortgage debt by individuals was unchanged from November at £4.6 billion in December. Gross lending decreased by £0.5 billion to £23.0 billion, while gross repayments decreased by £0.6 billion to £18.8 billion. The annual growth rate for net mortgage lending was unchanged at 3.4%¹.

The effective interest rate, described by the Bank as the actual interest paid, on newly drawn mortgages decreased to 4.15% in December from 4.20% in November. The rate on the outstanding stock of mortgages was 3.92%, up from 3.90% the previous month¹.

Consumer credit figures in the same release show net borrowing by individuals falling to £1.5 billion in December from £2.1 billion in November. Within that, net borrowing through credit cards was £0.7 billion, down from £1.0 billion, and net borrowing through other forms of consumer credit such as car dealership finance and personal loans fell to £0.8 billion from £1.2 billion¹.

The annual growth rate for all consumer credit was unchanged at 8.2%. The annual growth rate for credit card borrowing rose to 12.4% from 12.1%, which the Bank says is the highest since January 2024, while the rate for other forms of consumer credit was unchanged at 6.4%, the highest since September 2024¹.

The effective interest rate on interest-charging overdrafts decreased by 25 basis points to 21.32%. The rate on new personal loans rose for the fifth consecutive month, to 8.78% from 8.68%, and the rate on interest-charging credit cards decreased to 21.56% from 21.60%¹.

Households deposited an additional £4.8 billion with banks and building societies in December, down from £8.8 billion in November. This included £5.2 billion into ISAs and £5.1 billion into interest-bearing sight deposit accounts, offset by withdrawals of £1.8 billion from non-interest-bearing sight deposit accounts and £0.1 billion from interest-bearing time deposit accounts¹.

The effective interest rate paid on individuals' new time deposits decreased to 3.76% from 3.81%. The rate on the outstanding stock of time deposits was 3.35%, down from 3.36%, which the Bank says continues a downward trend observed since September 2024. The rate on the outstanding stock of sight deposits was unchanged at 1.75%¹.

Why it matters for households

Mortgage approvals are counted when a lender agrees a loan, before the money is drawn down, so the December figures point to how much completed borrowing may follow in the early months of 2026. The fall in house purchase approvals and the rise in remortgaging approvals suggest a shift in the mix of activity, with more borrowers approaching a different lender rather than moving home. Anyone whose existing deal ends in the coming months is affected by the remortgaging figures, while those buying are affected by the purchase figures.

The rate on newly drawn mortgages, at 4.15%, is the rate paid by borrowers taking out a mortgage in December, and it fell slightly from November. The rate on the outstanding stock, at 3.92%, is the average across all existing mortgages and rose slightly, reflecting the gap between older fixed deals and rates available now. For savers, the rate on new time deposits fell to 3.76%, while the rate on the outstanding stock of sight deposits, where most instant access money sits, was unchanged at 1.75%.

Consumer credit borrowing fell in December, but the annual growth rate on credit card borrowing, at 12.4%, was the highest since January 2024. The effective rate on interest-charging credit cards was 21.56%, and on interest-charging overdrafts 21.32%.

What happens next

The Bank of England's next Money and Credit release is scheduled for 2 March 2026¹.