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Mortgage approvals fall, but borrowing increases

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Mortgage lending in the UK fell to a nine-month low in June, but borrowing continued to increase.

Figures announced by The Bank of England show that there were 64,684 mortgage approvals in June, a fall from 65,109 in May, marking the lowest mortgage approval rate since September 2016.

The latest analysis also falls short of the Bank Of England’s prediction earlier this year that 71,000 mortgages would be granted in the month.

But despite fewer mortgages being taken out, the amount being borrowed has risen, as buyers accessed £11.8bn for property purchases last month, £100m higher than in May.

With mortgage lending seemingly slowing, what steps can you take to make sure you’re in the best possible position to access the money you need to make a house purchase?

Decide what type of mortgage you want

There is a wide range of mortgage products available on the market and as it is constantly evolving, new rates and incentives appear regularly.

If you’re looking to access a mortgage it is important to know what kind of product suits you. Generally, mortgages can be separated into two distinct camps: interest only and repayment.

As the names would suggest, a repayment mortgage is calculated so purchasers repay all the debt and interest over an agreed term, whereas interest-only mortgages see buyers pay the interest during the term and then the lump sum at the end of the term.

Interest-only mortgages used to be popular with first-time buyers but recent circumstances have reduced the availability dramatically, but they do still exist and it is important to consider all of the options before making a decision.

However, repayment is generally considered the best option, as although monthly payments may be a little more, it's the only option that leaves you without debt at the end of the mortgage term.

Save, save, save

The ability to save and develop a nest egg ahead of purchasing a new home cannot be underestimated.

Being able to put down as much of a deposit as possible is absolutely crucial and will enable you to access reduced interest rates. Putting that little bit extra into your deposit may mean less money to spend on furniture when you move in, but it will pay off in the long term, so squeeze as much out of your savings as possible.

Saving money back for mortgage fees is also vitally important. It is often a cost that is overlooked by house buyers, but some mortgages have fees associated with them that must be paid. Having this money saved and ready to be used can take a great deal of stress out of the situation and ensure you can access the deal agreed with your mortgage provider.

Check and double check

As mentioned, mortgage products are being introduced to the market regularly, so what was the best deal one day may no longer be the best option for you.

It is important to check the latest products regularly and, if you are using a mortgage broker, make sure to check the providers that do not operate through brokers. If you don’t, you may miss out on the perfect mortgage for you.

With so many options and potential pitfalls it is important to do your research and find the best product for you. You can use our mortgage calculator, created with the Mortgage Advice Bureau, to work out the best deal for you.


About Mortgage Advice Bureau

Mortgage Advice Bureau is the UK’s most recognised mortgage intermediary brand*, winning over 70 national awards for the quality of its advice and service during the last five years.

It has over 1,350 advisers offering expert mortgage and protection advice on a local, regional and national level to consumers, both face to face and over the phone. Mortgage Advice Bureau handles over £14bn of loans annually, and was the first – and is currently the only – mortgage intermediary to have floated on the London Stock Exchange, having joined the Alternative Investment Market (AIM) in November 2014.

For more information visit or join the conversation on social media @MABCentral

*Based on Opinium consumer research, Summer 2019.