Drawing on a dataset from its national network of advisers, the index offers a real-time snapshot of how borrower behaviour and mortgage market trends are evolving.
September 2025’s headline figures include:
- The average loan size rose 0.9% from the previous month, and now sits at £197,440
- The number of mortgage applications recorded was 22.7% higher than in September last year
- The average mortgage rate dropped by 32 basis points from the previous month to 4.4%
Fixed v. variable
Fixed rates remain the overwhelming product of choice, with 95.4% of borrowers opting to lock in their monthly repayments in September – down just over 1 percentage point over the past 12 months.
The dominance of fixed products tells us that, even with rates drifting lower, borrowers still prize certainty. But the picture isn’t quite as one-sided as before. The slight year-on-year dip suggests some households – even if they remain a tiny minority – are willing to take a chance on a variable deal to take advantage of future rate cuts, should they arrive.
The Bank of England’s caution around further rates cuts have dampened the appeal of variable rate mortgages. But that could change if signs grow that policymakers are becoming more dovish in response to persistently weak economic growth.
Product length preference
While borrowers still favour the certainty of a fixed rate deal, most are unwilling to lock themselves into a long-term deal. In September, 63.7% of new fixed-rate loans were for three years or less, up from 56% a year ago. That’s a sizeable shift, and it shows how people are keeping their options open in an uncertain environment.
With talk of recession growing louder and business confidence at record lows, many households appear to be hedging their bets. If the Bank of England is forced to cut rates more sharply to support the economy, shorter fixes give them more flexibility to benefit from falling borrowing costs. It’s clear that in today’s market, short-term fixes are increasingly seen as the middle ground between security and flexibility.
Repayment v. interest-only
Repayment mortgages continue to dominate the market, with 81% of new loans in September taken out on a repayment basis, only slightly down from 82% a year ago. Interest-only borrowing, by contrast, remains a specialist option, generally limited to borrowers with robust repayment strategies or those with access to regular and sizeable bonuses.
Looking ahead, potential changes to FCA rules – particularly around whether the sale of a property could be recognised as a valid repayment method – may broaden the appeal of interest-only. That would mark a notable development and would provide more options for borrowers, such as first-time buyers, to get onto the housing ladder.
Purchase-remortgage split
Refinancing continued to dominate activity in September, accounting for 61.5% of applications – up from 57% a year ago. That rise doesn’t necessarily point to a weak purchase market; rather, it underlines just how strong the refinancing wave has become.
According to UK Finance, around 785,000 borrowers refinanced in the first half of the year, with 1.6 million fixed rate deals due to mature before the year is out – and even more rolling off in 2026. Against that backdrop, it’s no surprise that remortgage demand is outweighing purchases.
With interest rates set to remain where they are for the foreseeable future, those that have been waiting on the sidelines may be tempted into action rather than waiting for a reduction in borrowing costs that may never appear. Therefore, it’s likely that refinance cases will continue to dominate the market for the rest of the year at the very least.
Average LTV
The slight dip in average LTVs this month suggests borrowers are putting down larger deposits – even if only modestly – to secure cheaper rates. While mortgage rates have eased over the past year, they remain elevated in historic terms, so households are understandably looking to reduce their monthly repayments.
With the mortgage guarantee scheme now permanent and lenders offering more flexible terms, conditions for first time buyers are gradually improving. If more buyers are able to get on the property ladder, we could see average LTVs edge up over time. That, in turn, may spark greater competition among lenders at the higher-LTV end, helping to bring rates down for those with smaller deposits.
Rob Clifford, Chief Executive of mortgage and protection network Stonebridge, says: “The mortgage market is shifting up a gear. Applications rose 22.7% year-on-year in September — a clear sign that confidence is returning, even in the face of wider economic headwinds.
“A big driver is the fall in rates from their recent peak. The average rate on new lending now stands at 4.40%, down 32 basis points year-on-year. For a typical borrower, that equates to around £432 in annual savings compared with 12 months ago.
“While the Bank of England remains cautious on the future path of interest rates, current levels appear low enough to spur borrowers back into action. Coupled with the large number of loans due to mature in 2025, that should help underpin activity through the remainder of the year.”
