Author - John Fraser-Tucker Editor - Helen Lovell

Last reviewed on 6 March 2025

In this article

• What was the average mortgage rate in February?

• Are people choosing fixed or variable rate mortgages?

• What was the average mortgage loan amount in February?

• What was the average mortgage deposit in February?

• How much are people borrowing for their mortgage?

• Are people switching to a new lender when remortgaging?

• Is there a lot of demand from first-time buyers?

• An overview of the mortgage market in February

What was the average mortgage rate in February 2025?

The average fixed mortgage rate in February was 4.6%, holding steady at the same average rate in January. However, it is slightly lower than the 4.7% we saw in February last year. 

We’re not seeing the significant year-on-year declines we saw going from 2023 to 2024, though. A small 0.1% difference in rate will only make marginal differences to mortgage repayments. For someone with a £200,000 mortgage and a 25-year term, moving from a 4.7% rate to a 4.6% rate would save them just £11 every month, or £132 a year. 

The below table highlights the average fixed rate for different deal lengths and different loan to value (LTV) ratios. This data is based on our analysis of the products available from five of the UK’s biggest mortgage lenders (Halifax, Santander, Nationwide, NatWest and HSBC), including both deals for new customers and product transfer options.

Mortgage rate trends in February

The Bank of England base rate was reduced from 4.75% to 4.5% on 6 February. While several lenders have marginally reduced rates since this point, this hasn’t made a dent in month-on-month average fixed rate.

Looking forward, many will be wondering if mortgage rates will continue to drop. Though, with inflation rate slowly creeping up and now standing at 3%, any further base rate drops throughout 2025 may be much more gradual. Many existing and prospective homeowners are keenly waiting to see what happens at the next Bank of England announcement on 20 March.

Are more people taking out a fixed or variable rate mortgage?

In February, 95% of Mojo customers applied for a fixed-rate mortgage. The remaining 5% of applications opted for tracker mortgages (a type of variable deal).

This percentage split was 96% fixed to 3% tracker in January, with the remaining 1% opting for discount mortgages. This means there’s a similar proportion of people opting for fixed rate deals this month. 

But if we look to February last year, the split was 98% fixed-rate mortgage versus just 2% tracker mortgages. 

This potentially suggests that, as rates stagnate, some may be more open to exploring other options. Opting for a variable mortgage rate means customers might have a financial advantage if rates do fall in the future, versus those on fixed-rate deals who’ll be locked into that rate until their deal ends, regardless of what happens in the market. 

What was the average mortgage loan amount in February?

Based on our customers’ applications, the average mortgage loan amount in February 2025 was £206,384. This was slightly higher (4%) than the previous month (£197,772). But it was a whopping 16% higher than February last year (£177,598).

The significant increase year-on-year is likely a reflection on rising house prices, which are now at 1.9% inflation compared to a year ago according to Zoopla’s House Price Index. 

If we break out loan amounts by the type of customer, we can see that first-time buyers and home movers tend to take out greater loans than remortgage customers. This is likely because remortgage customers have built up equity since first buying the property.

• Home movers and first-time buyers - £256,782

• Remortgage - £181,358

We break out the mortgage loan value by regions below.

What was the average mortgage deposit in February? 

15% of Mojo customers in February had a deposit of around 50%, enabling them to get a 50% loan-to-value (LTV) mortgage. Another 13% had at least a deposit worth 40% of the property value.

This follows a similar pattern to the previous month, with 50% and 40% being the most common deposit amounts for Mojo customers in January too.  

But this includes remortgage customers who tend to have higher deposits due to the equity they’ve built up in the property. 

If we look at those who purchased a new residential home in February, including home movers and first-time buyers, 30% got a 90% LTV mortgage, meaning they only put down a deposit of around 10%, while 29% of home movers and first-time buyers had a larger deposit of 20%. 

That means almost 60% of home buying customers opted to put down a 20% deposit or less, demonstrating the popularity of lower LTV mortgage products. 

Find out more about how much deposit you need to buy a house.

How much are people borrowing for their mortgage?

When people borrow for a mortgage, the amount they can borrow is usually capped at a certain multiplier of their income (usually around 4.5 times or a bit higher). But what loan to income ratio is most common?

In February, 16% of Mojo customers borrowed twice their annual income for their mortgage. In January, the most common loan to income ratios were also 2 and 1.5x their annual income.

But this includes remortgage customers who tend to need to borrow a bit less, with 18% of residential remortgage customers borrowing twice as much as their annual income in February.

Those who are buying a new home usually borrow a bit more, indicated by 18% of our residential purchase customers borrowing 3.5 times their annual income (this was also the most common loan to income bracket in January). A further 16% borrowed 4 times their income while just 9% borrowed the commonly discussed 4.5 times.

Read about the locations where first-time buyers need to borrow 15 times their annual income for a property.

When people remortgage, are they more likely to switch to a new lender or stay with their current one?

In February, 64% of Mojo’s reremortgage customers switched to a new lender. The other 36% opted to stay with their current lender (known as a product transfer). 

This is quite different to this time last year. In February 2024, 51% of customers switched to a new lender while 49% chose to stick with their current lender. 

A lot more people are choosing to remortgage to a different lender compared to this time last year. The most likely reason for this is that lenders are pricing their remortgage products more competitively for new customers so an increasing number of people could get a better deal by switching lenders.

For much of February last year, average rates for remortgaging with the same lender were slightly lower than alternative options, which may have encouraged customers to remain with their existing lender.

Now, though, it’s clear a wider range of competitive deals are coming to the market which may be tempting customers to switch to a new lender. It’s important that borrowers look at options from across the market rather than just from their existing lender. They may miss out on a cheaper deal if they don't.

Speaking to a mortgage broker who looks at deals from a variety of lenders across the market, can help you make sure you find a deal that's right for you.

Are people borrowing additional money when they remortgage?

Out of our customers who remortgaged, only 15% borrowed additional money. 3% released money, but the vast majority opted for a like-for-like remortgage.

This trend is very similar to last month. However, there has been a slightly bigger shift year-on-year - in February last year, just 11% opted for additional borrowing. 

It’s likely that the slightly higher rates last year, combined with market and economic uncertainty, may have put people off borrowing extra money. As the Bank of England base rate falls and market outlook improves, homeowners may feel more confident borrowing extra funds.

Find out about remortgaging for home improvements.

Is there a lot of demand from first-time buyers?

First-time buyers made up 52% of Mojo’s home buyer customers in February, a similar split compared to 2024 too. 

The below table shows the proportional split of our first-time buyers across age bands, this month and last month.

The above age band split broadly falls in line with what’s expected, with most people buying their first home in their 20s or 30s.

Although this can vary significantly depending on the region and city, with people often being older by the time they buy in more expensive areas, such as London.

Learn more about the average age of first-time buyers with breakdowns by region.