Mortgage borrowing has reached its highest level in almost two years. More people are taking out loans as interest rates go down. According to the Bank of England, 62,000 mortgages were approved in July. This is the highest number since September 2022, showing that many buyers were waiting for lower interest rates to make their move.
Last September, borrowing costs went up fast, mainly due to issues caused by the Liz Truss mini-budget. But in early August, the first interest rate cut in four years was made. This gave buyers more confidence to borrow, making home purchases more affordable.
The total amount of money borrowed for buying homes also hit the highest point in 18 months. Lower interest rates have made it easier for buyers to afford homes. Even though mortgage rates are still higher than before the pandemic, they are much lower than they were recently. The average interest rate on new mortgages is now 4.81%, compared to the ultra-low rates of 1% or 2% seen a few years ago.
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More Confidence in Borrowing
The Bank’s data also shows that people are more willing to borrow in other areas too. Credit card debt increased, which could be due to families spending on holidays or summer activities.
However, borrowing costs have also gone up. Credit card interest rates have risen to 21.28%, and overdraft interest rates have reached 22.56%. Meanwhile, the UK’s largest building society reported that house prices are rising at the fastest yearly rate seen in nearly two years.
This growing confidence in borrowing shows that people are hopeful for cheaper borrowing options, despite higher costs in some areas.
For borrowing the amount you must be first aware of how much amount you’re eligible for borrowing. Use our calculator to get an estimate of how much you can borrow.
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Please note, this calculator only provides indications of possible borrowings. Contact us for a free bespoke contractor mortgage recommendation.
Importance of Expert Guidance
We are always available with professional and knowledgeable mortgage consultants to answer all of your questions. To make this borrowing process smooth we made the process easier for you. Our how much I can borrow calculator can give you an estimation of the loan amount. Get to know your estimated loan amount and get the best possible results. For detailed and professional advice you can immediately Book Our Free Consultation. Our team is ready to support you throughout your mortgage process and guide you making right decisions.
