Due to interest rates decreasing in recent years, mortgages in the United Kingdom have become overall more affordable: In 2007, when mortgages were the least affordable, a home buyer spent on average **** percent of their income on mortgage interest and *** percent on capital repayment. In 2019, the year with the most affordable mortgages, mortgage interest accounted for *** percent and capital repayment was **** percent of their income. As interest rates increase in response to the rising inflation, mortgage affordability is expected to worsen. Though below the levels observed before 2007, the total mortgage repayment between 2022 and 2026 is expected to exceed ** percent of income.

Mortgage rates increased at a record pace in 2022, with the 10-year fixed mortgage rate doubling between March 2022 and December 2022. With inflation increasing, the Bank of England introduced several bank rate hikes, resulting in higher mortgage rates. In May 2025, the average 10-year fixed rate interest rate reached **** percent. As borrowing costs get higher, demand for housing is expected to decrease, leading to declining market sentiment and slower house price growth. How have the mortgage hikes affected the market? After surging in 2021, the number of residential properties sold declined in 2023, reaching just above *** million. Despite the number of transactions falling, this figure was higher than the period before the COVID-19 pandemic. The falling transaction volume also impacted mortgage borrowing. Between the first quarter of 2023 and the first quarter of 2024, the value of new mortgage loans fell year-on-year for five straight quarters in a row. How are higher mortgages affecting homebuyers? Homeowners with a mortgage loan usually lock in a fixed rate deal for two to ten years, meaning that after this period runs out, they need to renegotiate the terms of the loan. Many of the mortgages outstanding were taken out during the period of record-low mortgage rates and have since faced notable increases in their monthly repayment. About **** million homeowners are projected to see their deal expire by the end of 2026. About *** million of these loans are projected to experience a monthly payment increase of up to *** British pounds by 2026.

About 1.4 million households with mortgages up for renewal in the United Kingdom (UK) will face increasing monthly costs by the end of 2024 because of the aggressive mortgage interest hikes since the beginning of 2022. For about one million of these households, the increase will be between one British pound and 300 British pounds, while for 388,000 households, the increase will be higher. By December 2026, the number of households with rising mortgage payments is projected at 3.9 million. Meanwhile, about two million mortgage borrowers are expected to benefit from reduced mortgage payments by the end of 2026.

Soaring interest rates are filtering through to the housing market, with lenders raising mortgage rates and pulling deals. What effect is this having on the housing market?

Mortgage brokers’ revenue is anticipated to climb at a compound annual rate of 4.5% over the five years through 2024-25 to £2.3 billion, including estimated growth of . Rising residential property transactions stimulated by government initiatives and rising house prices have driven industry growth. However, mortgage brokers have faced numerous obstacles, including downward pricing pressures from upstream lenders and a sharp downturn in the housing market as rising mortgage rates ramped up the cost of borrowing. After a standstill in residential real estate activity in the immediate aftermath of the COVID-19 outbreak, ultra-low base rates, the release of pent-up demand, the introduction of tax incentives and buyers reassessing their living situation fuelled a V-shaped recovery in the housing market. This meant new mortgage approvals for house purchases boomed going into 2021-22, ramping up demand for brokerage services. 2022-23 was a year rife with economic headwinds, from rising interest rates to fears of a looming recession. Yet, the housing market stood its ground, with brokers continuing to benefit from rising prices. Elevated mortgage rates eventually hit demand for houses in the first half of 2023, contributing to lacklustre house price growth in 2023-24, hurting revenue, despite a modest recovery in the second half of the year as mortgage rates came down. In 2024-25, lower mortgage rates and an improving economic outlook support house prices, driving revenue growth. Mortgage brokers’ revenue is anticipated to swell at a compound annual rate of 5.3% over the five years through 2029-30 to £2.9 billion. Competition from direct lending will ramp up. Yet, growth opportunities remain. The emergence of niche mortgage products, like those targeting retired individuals and contractors, as well as green mortgages, will support revenue growth in the coming years. AI is also set to transform the industry, improving cost efficiencies by automating tasks like document verification, risk assessment and customer profiling.

August 2024 marked a significant shift in the UK's monetary policy, as it saw the first reduction in the official bank base interest rate since August 2023. This change came after a period of consistent rate hikes that began in late 2021. In a bid to minimize the economic effects of the COVID-19 pandemic, the Bank of England cut the official bank base rate in March 2020 to a record low of *** percent. This historic low came just one week after the Bank of England cut rates from **** percent to **** percent in a bid to prevent mass job cuts in the United Kingdom. It remained at *** percent until December 2021 and was increased to one percent in May 2022 and to **** percent in October 2022. After that, the bank rate increased almost on a monthly basis, reaching **** percent in August 2023. It wasn't until August 2024 that the first rate decrease since the previous year occurred, signaling a potential shift in monetary policy. Why do central banks adjust interest rates? Central banks, including the Bank of England, adjust interest rates to manage economic stability and control inflation. Their strategies involve a delicate balance between two main approaches. When central banks raise interest rates, their goal is to cool down an overheated economy. Higher rates curb excessive spending and borrowing, which helps to prevent runaway inflation. This approach is typically used when the economy is growing too quickly or when inflation is rising above desired levels. Conversely, when central banks lower interest rates, they aim to encourage borrowing and investment. This strategy is employed to stimulate economic growth during periods of slowdown or recession. Lower rates make it cheaper for businesses and individuals to borrow money, which can lead to increased spending and investment. This dual approach allows central banks to maintain a balance between promoting growth and controlling inflation, ensuring long-term economic stability. Additionally, adjusting interest rates can influence currency values, impacting international trade and investment flows, further underscoring their critical role in a nation's economic health. Recent interest rate trends Between 2021 and 2024, most advanced and emerging economies experienced a period of regular interest rate hikes. This trend was driven by several factors, including persistent supply chain disruptions, high energy prices, and robust demand pressures. These elements combined to create significant inflationary trends, prompting central banks to raise rates in an effort to temper spending and borrowing. However, in 2024, a shift began to occur in global monetary policy. The European Central Bank (ECB) was among the first major central banks to reverse this trend by cutting interest rates. This move signaled a change in approach aimed at addressing growing economic slowdowns and supporting growth.

Data for households in receipt of Support for Mortgage Interest (SMI) loans is available in Stat-Xplore on a quarterly basis.

These quarterly official statistics include:

• the https://stat-xplore.dwp.gov.uk/webapi/openinfopage?id=SMI_CASELOAD" class="govuk-link">number of households who are currently in receipt of the support
• the https://stat-xplore.dwp.gov.uk/webapi/openinfopage?id=SMI_CUM" class="govuk-link">number who have received SMI loans so far

See the background information and methodology note for an explanation of households.

The statistics are broken down by:

• Quarter
• Country, Region
• Qualifying Benefit

Background information

Read the background information and methodology note for guidance on these statistics, such as timeliness and interpretation.

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We welcome all feedback on the content, relevance, accessibility and timing of these statistics to help us in producing statistics that meet user needs. For non-media enquiries on these statistics email: nathan.kelly@dwp.gov.uk

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Next releases

Support for Mortgage Interest statistics are published quarterly. The dates for future releases are listed in the statistics release calendar.

Pre-release access

In addition to staff who are responsible for the production and quality assurance of the statistics, up to 24-hour pre-release access is provided to ministers and other officials. We publish the job titles and organisations of the people who have been granted up to 24-hour pre-release access to the latest Support for Mortgage Interest statistics.

The benchmark interest rate in the United Kingdom was last recorded at 4 percent. This dataset provides - United Kingdom Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

Mortgage rates in the United Kingdom (UK) have risen dramatically since the beginning of 2022, causing concerns about households with loans up for renewal facing notable increases in costs. That is the case for 1.4 million fixed rate mortgages up for renewal in 2023. This type of mortgage is a popular choice among homebuyers because it allows them to lock in the interest rate for a specific period. After the period runs out, homebuyers need to renegotiate the loan or switch to a variable interest rate. The vast majority of loans up for renewal until 2024 have an initial effective mortgage rate of less than 2.5 percent - significantly lower than the current mortgage rates.

The average mortgage interest rate decreased in nearly every country in Europe between 2012 and 2021, followed by an increase in response to inflation. In the fourth quarter of 2024, Poland, Hungary, and Romania topped the ranking as the countries with the highest mortgage interest rates in Europe. Conversely, Belgium, Spain, and Italy displayed the lowest interest rates. The UK, which is the country with the largest value of mortgages outstanding, had an interest rate of **** percent.

Mortgage Rate in the United Kingdom increased to 6.99 percent in July from 6.98 percent in June of 2025. This dataset provides - United Kingdom BBA Mortgage Rate- actual values, historical data, forecast, chart, statistics, economic calendar and news.

This dataset provides values for INTEREST RATE reported in several countries. The data includes current values, previous releases, historical highs and record lows, release frequency, reported unit and currency.

Companies operating in the third-party real estate industry have had to navigate numerous economic headwinds in recent years, notably rising interest rates, spiralling inflation and muted economic growth. Revenue is projected to sink at a compound annual rate of 0.6% over the five years through 2025, including an estimated jump of 1.2% in 2025 to €207.6 billion, while the average industry profit margin is forecast to reach 35.1%. Amid spiralling inflation, central banks across Europe ratcheted up interest rates, resulting in borrowing costs skyrocketing over the two years through 2023. In residential markets, elevated mortgage rates combined with tightening credit conditions eventually ate into demand, inciting a drop in house prices. Rental markets performed well when house prices were elevated (2021-2023), being the cheaper alternative for cash-strapped buyers. However, even lessors felt the pinch of rising mortgage rates, forcing them to hoist rent prices to cover costs and pricing out potential buyers. This led to a slowdown in rental markets in 2023, weighing on revenue growth. However, this has started to turn around in 2025 as interest rates have been falling across Europe in the two years through 2025, reducing borrowing costs for buyers and boosting property transactions. This has helped revenue to rebound slightly in 2025 as estate agents earn commission from property transactions. Revenue is forecast to swell at a compound annual rate of 3.7% over the five years through 2030 to €249.5 billion. Housing prices are recovering in 2025 as fixed-rate mortgages begin to drop and economic uncertainty subsides, aiding revenue growth in the short term. Over the coming years, PropTech—technology-driven innovations designed to improve and streamline the real estate industry—will force estate agents to adapt, shaking up the traditional real estate sector. A notable application of PropTech is the use of AI and data analytics to predict a home’s future value and speed up the process of retrofitting properties to become more sustainable.

Interest rates in the UK spiked in 2022 and 2023, with the average rate for new mortgage advances to individuals and individual trusts rising by **** percentage points between January 2022 and January 2024. Mortgages on a floating interest rate were the most expensive as of January 2024, at **** percent. On the other hand, the average rate for new advances with a five-year fixed rate was **** percent.

The UK equity lending market, characterized by a diverse range of products including fixed-rate loans and home equity lines of credit (HELOCs), offered through banks, building societies, online lenders, and credit unions, is experiencing steady growth. The market's 5.00% CAGR from 2019 to 2024 suggests a robust and expanding sector. Drivers for this growth include increasing homeownership rates, rising property values, and a growing awareness of equity release products among homeowners seeking to unlock their housing wealth for various purposes such as home improvements, debt consolidation, or funding retirement. However, the market faces certain restraints, including stringent lending regulations aimed at protecting borrowers, economic uncertainty potentially impacting borrowing appetites, and competition from alternative financial products. The segment breakdown indicates a significant portion of the market is held by traditional institutions like banks and building societies, although the emergence of online lenders is progressively increasing the competition and driving market innovation. The preference for online or offline modes of accessing these loans is likely dependent on factors such as demographic trends, technological comfort, and the specific offerings of individual lenders. Given the UK's housing market dynamics, further growth is anticipated, fueled by an increasing number of homeowners with substantial equity in their properties. The forecast period (2025-2033) projects continued growth, albeit potentially at a slightly moderated pace compared to the historical period, reflecting potential economic fluctuations. The regional data, while not explicitly quantified for the UK, implies a concentrated market within the UK itself, with smaller contributions from other European regions and minimal impact from regions like North America or Asia-Pacific. While precise market sizing for the UK is unavailable, estimations based on the provided global CAGR and considering the UK's significant housing market and economy suggest a substantial and expanding market opportunity. Key players such as Barclays Bank, Nationwide Building Society, and other established financial institutions will continue to dominate the landscape, while the innovative online lenders represent a growing force. The market's future success hinges on maintaining responsible lending practices, adapting to evolving technological trends, and addressing the evolving needs of homeowners seeking flexible and accessible equity release solutions. Recent developments include: In February 2022, Selina Advance, a London-based fintech business, has raised USD150 million in investment to expand its home equity lending solutions to customers across the UK. The round of fundraising, coordinated by global private equity platform Lightrock, included USD 35 million in equity and USD 115 million in loans from Goldman Sachs and GGC to help the company expand across the UK., On February 2, 2022, Santander announced its decision to stop originating residential mortgages and home equity lines of credit (HELOCs) . Santander will continue to service existing home loans and lines of credit received till February 11, 2022.. Notable trends are: Raising Homeownership Rate is Driving the Home Equity Lending Market.

The non-depository financing industry's revenue has contracted at a projected compound annual rate of 2.1% over the five years through 2024-25. The COVID-19 outbreak caused a large drop in borrowing in 2020-21 as consumers faced a lack of spending opportunities, outweighing the gains from businesses taking out additional loans to stay afloat. The industry has also faced stronger regulatory oversight to combat the proliferation of overly risky and expensive loans. The cost-of-living crisis has caused consumer lending to swell as households rely on short-term borrowing to make up for weakened savings and costs outpacing wages. Soaring interest rates have caused the cost of mortgages to skyrocket, damaging revenue as buyers pull back and lenders are more cautious. The Non-Depository Financing industry's revenue is estimated to climb by 1.7% in 2024-25 – and is expected to total £6.7 billion. This comes from the much-anticipated sliding down of interest rates that will aid the mortgage market and big returns from newer sectors like OpenAI and sustainable technologies. Industry revenue is expected to swell at a compound annual rate of 2.4% to £7.6 billion over the five years through 2029-30. The need for credit is set to be supported by the previous erosion of savings from spiked inflation, leading to more loans needed for sizeable investments as confidence rebounds. Non-depositary financing companies will continue facing stiff competition from other types of lenders, like peer-to-peer lenders. The regulation constricting payday loans will continue to push services towards a lower margin and higher volume approach, aiding those with lower credit scores but dented industry profit. The high cost of mortgages and economic headwinds will settle and start to rebuild the housing market, supporting revenue.

The UK car loan market, valued at approximately £56.62 million in 2025, is projected to experience robust growth, fueled by a Compound Annual Growth Rate (CAGR) of 6.60% from 2025 to 2033. This expansion is driven by several factors. Rising car prices and the increasing preference for purchasing vehicles through financing options are key contributors. The market is segmented by product type (new and used cars for both consumer and business use) and provider type (banks, non-banking financial services, original equipment manufacturers (OEMs), and fintech companies). The competitive landscape includes established players like Barclays Partner Finance, Santander UK, and Lloyds Bank, alongside burgeoning fintech lenders offering innovative financing solutions. Growing consumer demand, particularly for used cars, is expected to stimulate market growth, alongside competitive lending rates and flexible repayment terms offered by various providers. However, economic uncertainties and potential interest rate hikes could pose challenges, potentially moderating growth in the latter part of the forecast period. The increasing adoption of online platforms and digital lending technologies is streamlining the car loan application process, enhancing customer convenience, and further boosting market expansion. The regional breakdown of the UK car loan market reveals a concentration within the country itself, given the regional data provided focuses on a global perspective. However, within the UK, varying regional economic conditions and consumer purchasing power could influence the distribution of loan volumes across different areas. The presence of major financial institutions across various regions within the UK ensures widespread access to car financing. The growth trajectory depends significantly on the broader economic climate and consumer confidence, which will determine overall demand for car loans and influence lending behaviors. The continued evolution of financial technology and its application within the automotive finance sector is poised to reshape the market's dynamics throughout the forecast period. Recent developments include: March 2023: AMS, the global talent solutions business, and Tesco Bank, which serves over 5 million customers in the United Kingdom, announced the establishment of a new 3-year partnership., Feb 2022: Barclays announced a strategic partnership with global corporate venture builder Rainmaking to drive FinTech innovation. With the support of Rainmaking, Barclays will launch a new suite of initiatives targeted at FinTech founders across the globe.. Key drivers for this market are: Low Interest Rates are Driving the Market, Increased Consumer Demand for Cars. Potential restraints include: Low Interest Rates are Driving the Market, Increased Consumer Demand for Cars. Notable trends are: Low Interest Rates are Driving the Market.

The rapid growth of the Peer-to-Peer Lending (P2P) Platforms industry has slowed in recent years, as the industry is maturing and the initial wave of firms entering the industry has begun to stabilise. Revenue is expected to remain fairly flat, growing at a compound annual rate of just 0.1% over the five years through 2024-25 to £342 million. Economic conditions, interest rates and regulation are all affecting P2P lenders’ performance. Revenue volatility is high because of the industry’s infancy and volatile economic conditions recently. Funding Circle dominates the industry, though it exited the retail market in March 2022. Zopa, previously a leading lender, exited the market in December 2021. Other lending platforms, like Ratesetter, have also left the industry or have stopped offering services to retail investors. The main reasons for this are the rising regulatory burden and heightened uncertainty. Economic uncertainty has deterred borrowing for investment purposes, increasing lenders' risk averseness and limiting revenue growth. Following an improvement in economic conditions in 2021-22, soaring inflation and heightened uncertainty in the two years through 2023-24 drove some investors to withdraw money from P2P platforms, denting revenue. A combination of falling interest rates and improving economic conditions – inflation is finally dropping – is set to drive investment activity in 2024-25, supporting demand for P2P lending and lifting revenue growth. However, with this will come less stringent lending criteria from traditional banks, intensifying competition and constraining growth. Revenue is anticipated to grow at a subdued rate of 6.9% in 2024-25. Revenue is forecast to swell at a compound annual rate of 13.8% over the five years through 2029-30 to reach £651.7 million. Growth will slow as the industry matures and market acceptance reaches saturation. At the same time, the regulatory burden is likely to mount, pushing more firms out of the market. Despite this, new lenders will continue to set up shop, because many market niches (like ESG) are yet to be filled. The industry is still likely to operate at a loss, though losses will gradually narrow. Larger lenders will likely consolidate to maintain growth and cement their positions.

Key information about United Kingdom Long Term Interest Rate

• United Kingdom Long Term Interest Rate: Month Avg: United Kingdom: ECB Harmonised was reported at 4.52 % pa in Feb 2025, compared with 4.67 % pa in the previous month.
• UK Long Term Interest Rate data is updated monthly, available from Jan 1993 to Feb 2025.
• The data reached an all-time high of 8.99 % pa in Sep 1994 and a record low of 0.15 % pa in Jul 2020.
• Long Term Interest Rate is reported by reported by CEIC Data.

• In the latest reports, UK Short Term Interest Rate: Month End: ICE LIBOR: 3 Months was reported at 0.09 % pa in Apr 2021.
• The cash rate (Policy Rate: Month End: Base Rate) was set at 4.50 % pa in Feb 2025.
• UK Exchange Rate against USD averaged 0.79 (USD/GBP) in Jun 2023.

Mortgage interest rates worldwide varied greatly in June 2025, from less than ******percent in many European countries to as high as ***percent in Turkey. The average mortgage rate in a country depends on the central bank's base lending rate and macroeconomic indicators such as inflation and forecast economic growth. Since 2022, inflationary pressures have led to rapid increases in mortgage interest rates. Which are the leading mortgage markets? An easy way to estimate the importance of the mortgage sector in each country is by comparing household debt depth, or the ratio of the debt held by households compared to the county's GDP. In 2024, Switzerland, Australia, and Canada had some of the highest household debt to GDP ratios worldwide. While this indicator shows the size of the sector relative to the country’s economy, the value of mortgages outstanding allows to compare the market size in different countries. In Europe, for instance, the United Kingdom, Germany, and France were the largest mortgage markets by outstanding mortgage lending. Mortgage lending trends in the U.S. In the United States, new mortgage lending soared in 2021. This was largely due to the growth of new refinance loans that allow homeowners to renegotiate their mortgage terms and replace their existing loan with a more favorable one. Following the rise in interest rates, the mortgage market cooled, and refinance loans declined.