The UK mortgage market in 2025 was shaped by falling rates towards year-end, a strong autumn rush and a continued preference for fixed-rate borrowing, according to new analysis from Mojo Mortgages.

Analysis of proprietary data from Mojo Mortgages, covering the period from 1 January to 1 December, 2025, shows that borrower behaviour over the past year was defined by a desire for payment stability and a growing willingness among remortgagers to switch lenders in search of better deals.

The figures also point to a resilient cohort of first-time buyers, with younger borrowers continuing to enter the market despite affordability pressures, and clear regional hotspots emerging across England.

FIXED RATES REMAIN THE DEFAULT

Fixed-rate mortgages accounted for the overwhelming majority of completed loans during the year, with almost 95.5% of customers choosing to lock in their rate. Tracker mortgages made up just 4.4% of completions, underlining the ongoing appetite for certainty.

Among fixed-rate borrowers, two-year products remained the most popular, accounting for 56.8% of completed mortgages, while five-year fixes represented a further 35.8%. Three-year and one-year fixed rates accounted for a much smaller share of the market.

The dominance of fixed rates was reinforced by a gradual softening in pricing from major high street lenders as the year progressed. The lowest two-year and five-year fixed rates both reached 4.1% on 1 December, having peaked at 4.8% and 4.5% respectively in late January.

John Fraser-Tucker, head of mortgages at Mojo Mortgages, said: “While rates saw a high and low throughout the year, the market ended 2025 with rates softening, providing a significant boost of confidence for buyers entering the new year.

“The fact that the lowest two-year and five-year fixed rates from our key lenders were both recorded at a competitive 4.1% on 1 December shows just how much things have improved since the highs we saw in January.”

Fraser-Tucker added that borrower behaviour was beginning to shift as rates eased.

“The vast majority of our customers chose to lock in a fixed rate, highlighting a continued desire for payment stability. However, the data also shows remortgagers are now more prepared to shop around and switch to a new lender, rather than just taking a product transfer.

“This suggests the small, downward movement in rates has created enough competition among lenders to encourage borrowers to actively hunt for the best available deal.”

REGIONAL HOTSPOTS AND PROPERTY CHOICES

At the initial fact-finding stage, Greater London emerged as the most active region, accounting for 12.7% of customers seeking a mortgage, followed by the West Midlands at 10.2% and the East Midlands at 9.5%.

The East of England represented 9.1% of customers, while the North West also featured prominently, reflecting continued demand across both southern and northern markets.

In terms of property type, traditional houses continued to dominate borrower preferences. More than 85% of customers were purchasing a house, compared with just over 13% buying a flat.

FIRST-TIME BUYERS GAIN MOMENTUM

First-time buyers increased their presence in the market during 2025, with Mojo Mortgages recording a 5.7% rise in activity compared with 2024 among those seeking mortgage advice.

The average age of a first-time buyer stood at 32.3, with borrowers aged between 25 and 34 accounting for just over half of all first-time buyers. Completed applications during the year included buyers as young as 19 and as old as 61, alongside one application featuring a second applicant aged 83.

Among first-time buyers who completed a mortgage, the average deposit was £56,828, while the average loan size rose to £236,125, up from £201,286 in 2024. Average initial monthly repayments stood at £1,211, with an average term length of just over 30 years.

REMORTGAGERS MORE WILLING TO SWITCH

Remortgaging behaviour also evolved during the year, with a greater proportion of borrowers opting to move to a new lender rather than remain with their existing provider.

More than 55.5% of customers completing a remortgage switched to a new lender, up from 52% in 2024, while 44.5% chose a product transfer. In addition, 7.5% of remortgagers borrowed extra funds, most commonly to support home improvements.

Home movers, meanwhile, continued to transact at higher values than first-time buyers. The average home mover deposit reached £139,454, with an average loan amount of £285,850, up from £239,461 a year earlier. Average monthly repayments were £1,461, with a shorter average term of 27.5 years.

AUTUMN DRIVES COMPLETIONS

Seasonal trends were also evident, with activity peaking in the autumn. September, October and November accounted for almost 35% of all mortgage completions during the year, with October the single busiest month.

Summer completions represented just under 27% of the annual total, followed by spring at 25.1%. Winter activity remained comparatively subdued, accounting for 13.2% of completed mortgages.

OUTLOOK FOR 2026

Looking ahead, Mojo Mortgages expects the themes seen in late 2025 to carry into the new year.

Fraser-Tucker said: “2025 has been defined by two key factors: the unwavering demand for fixed-rate stability and the resilience of the first-time buyer.

“With mortgage rates hitting their annual lows right at the end of the year, there is a real boost for buyers moving into 2026. We expect this positive momentum to continue, particularly in regions such as the North West and Greater London.”