Mortgage applications up 7% year-on-year as rates continue to fall: Stonebridge

Mortgage applications are 7% higher than in October last year, as rates and average loan sizes continue to fall, according to the latest figures from Stonebridge.

The research draws on a dataset from Stonebridge's national network of advisers, who facilitated more than £12bn of lending last year.

The figures show that the average loan size dropped slightly by 1.1% from last month and now sits at £195,068. Average loan-to-values have declined for the second consecutive month in October, reaching their lowest level since March.

Stonebridge puts the decline down to a mixture of flat house prices and borrowers choosing to put down larger deposits to secure lower rates.

The data shows that the average mortgage rate dropped by 21 basis points from the previous month to 4.43%.

Remortgages and product transfers made up nearly two-thirds of activity in October, however, Stonebridge stressed that this does not mean the purchase market is subdued.

Conversely, purchase lending has exceeded last year’s levels in almost every month so far this year. 

Rob Clifford, chief executive of Stonebridge, commented: “The fact that mortgage applications are up more than 7% year-on-year shows the market is still moving forward despite wider economic uncertainty and speculation around the Autumn Budget.

“One of the key reasons is that lenders continue to compete aggressively. Many of the major high street names have reduced rates in recent weeks, meaning the average borrower is now saving around £300 a year compared to 12 months ago. That may seem a small saving, but it all counts at a time where many people are still struggling with the rising cost of living.

“If we see another rate cut before the end of the year, as expected, that could provide even more momentum as we head into 2026. Combined with the large volume of fixed rate loans due to mature this year and next, we expect activity to strengthen further over the coming 12 months.

"This has been a strong year for refinancing, with around 1.6 million fixed rate loans up for renewal this year. It’s therefore no surprise that remortgages and product transfers made up nearly two-thirds of activity in October. 

“At first glance, the data might suggest that the purchase market is subdued, but that’s not the case. Purchase lending has exceeded last year’s levels in almost every month so far this year. It’s simply the sheer volume of loans maturing in 2025 that has tilted the market towards refinancing. 

“Looking ahead, if the Bank of England’s Monetary Policy Committee cuts rates another two or three times, as some expect, that should help restore balance. Lower rates tend to boost confidence among both movers and first-time buyers, which could boost purchase activity in the market.”