This is the average borrowing amount for UK mortgages right now

With the stamp duty holiday now tapering, what is the average borrowing amount for mortgages in the UK? Diana Bocco takes a look.

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The end of the stamp duty holiday in June was expected to bring a slow down in applications for mortgages in the UK. But new research by MoneySuperMarket shows that that isn’t happening.

As Jo Thornhill, mortgage expert at MoneySuperMarket, explains: “The stamp duty holiday proved very popular with many homebuyers. So it’s only natural that many feared its end could lead to a major dip in home-buying interest.” 

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Homebuyers are divided in their opinion about the stamp duty holiday, though. Around 51% believe the stamp duty holiday kept the housing market moving in uncertain times. The other 49%, however, believe it fuelled a housing bubble. But how exactly does this translate to the market and property purchasing power in the UK?

How much are people borrowing for UK mortgages?

According to MoneySuperMarket, the average borrowing amount is £213,000 right now. Two-year (40%) and 5-year fixed (28%) mortgages are the most popular in the UK. The average loan amount is likely connected to the new stamp duty threshold of £250,000, which is encouraging people to take advantage of stamp duty savings.

“Buyers who are able to complete their purchases before October can still make significant savings,” says Thornhill.

The growing availability of 95% LTV mortgages in the UK is also making getting on the housing ladder more realistic for many buyers. In the six months since January 2021, the number of 95% LTV mortgages has increased by 1,262%, from 13 to 177.

According to Thornhill, “This is a positive trend that is making it easier for younger buyers to get on the housing ladder.”

What’s the median price for houses in the UK? 

According to Local Government Inform, the median price for a home in the UK at the end of the last quarter of 2020 was £259,000. Yorkshire and Humberside, the North West and the North East had the lowest prices at anywhere from £143,000 to £175,000. Not surprisingly, London had the highest median figure, with prices reaching 495,000. The South East, with median prices around £342,000, was second after London.

With the average mortgage loan standing at around £213,000 right now, it’s fair to say that property is likely selling more in affordable areas.

Searching for a home yourself? You can use a mortgage calculator to see how much you can borrow. A calculator can also give you an idea of how much your monthly payments will be. 


How do buyers feel about the market?

“Our research reveals that though there’s a been a slight fall in general and first-time buyer [mortgage] searches, interest in home buying remains steady,” says Thornhill.

This doesn’t mean buyers are not worrying. Almost half of those surveyed are concerned that we are now in a housing bubble that will eventually burst. A further quarter (25%) felt that the stamp duty holiday was unfair – particularly for buyers that missed out.

Thinking about applying for a mortgage? There are ways you can prepare your finances before you apply. Lenders usually look at your loan-to-income ratio to decide how much to loan you. But if you already have other loans or credit card repayments, this might affect the size of your mortgage loan. Paying off some of your outstanding debt could help you qualify for a better mortgage. 

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