Mortgage activity saw a notable boost in July, with applications rising 9.2% year-on-year, according to fresh figures from Stonebridge. The firm’s national network of advisers reported continued market momentum as borrowing costs decline.

The average mortgage rate in July dropped to 4.44%, marking a 62 basis point decrease from the same period last year. This shift translates to savings of approximately £890 annually for the average borrower. Remortgaging accounted for nearly 60% of all activity, largely influenced by the expiration of fixed-rate terms and borrowers’ desire to secure more competitive deals. Stonebridge also revealed that 96% of new borrowers selected fixed-rate products in July, the same proportion as last year. Although tracker rates are marginally cheaper, the slight advantage has not been enough to sway borrowers away from the stability of fixed deals.

Notably, two-thirds of those who fixed their mortgage in July opted for terms of three years or less, a rise from just under 61% a year ago. Despite affordability concerns over the past two years, interest-only borrowing remains limited. Repayment mortgages represented 81.2% of new loans in July, virtually unchanged from the same time last year. However, purchase loans made up 40.6% of mortgage activity last month, down from 50% a year earlier.

Stonebridge CEO Rob Clifford commented on the data: “After a bruising couple of years, the mortgage market is starting to find its feet again, with falling rates boosting activity and giving a much-needed confidence boost to borrowers.” He also stated, “Applications jumped 9.2% in July compared with a year ago, proof that cheaper borrowing is starting to grease the wheels of the market. The average rate on new loans has dropped to 4.44% – 62 basis points lower than last July.”

Rob continued by saying, “While mortgage rates remain much higher than they were a few years ago, the fall over the past 12 months has been meaningful. On a typical 25-year term, that’s worth around £890 a year back in borrowers’ pockets.” Followed by, “With the potential for two further rate cuts this year, the market should continue its recovery in the second half of 2025. We’re not back to the boom times, but compared with where we were 12 months ago, this is a much healthier market.” 

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Source: Becky Bellamy, Mortgage Strategy