Mortgage borrowing in March at highest level in almost four years

Borrowers took advantage of lower stamp duty costs in March before the increased rates came into effect.

Individuals taking out a mortgage borrowed an additional £13.0 billion (on net) in March, an increase of £9.7 billion on the previous month, the Bank of England’s latest Money and Credit release shows.

This increase brought the total sum of gross mortgage lending to £39.9 billion, which is the highest this figure has been since June 2021.

The jump in net mortgage borrowing in March came after a more subdued February, when it fell by £1 billion. However, March’s increase perhaps wasn’t too unexpected as many buyers tried to complete their property purchase before the stamp duty thresholds changed at the end of the month.

Indeed, data from HMRC showed that there were 177,370 residential property transactions in the UK in March (seasonally adjusted), 62% higher than the previous month.

What next for the mortgage market?

While net mortgage borrowing thrived in March, it may not be too surprising to see demand cool over the next couple of months.

Net mortgage approvals, which is often a good indicator of future borrowing, fell for the third month in a row to reach 64,300 in March.

“There always tends to be a lull after a tax break ends, and the level of uncertainty about the global economy may also be making people wonder whether this is a good time to make a big financial commitment,” explained Sarah Coles, head of personal finance at Hargreaves Lansdown.

On the other hand, approvals for remortgaging with a different lender rose by 1,000 in March to 33,400.

“Those borrowers looking to refinance moved in droves, with approvals for remortgage customers moving to another lender rising up after a prior fall. This is encouraging to see as there will be millions of borrowers coming off a fixed rate deal this year” commented Rachel Springall, Finance Expert at Moneyfactscompare.co.uk.

In positive news for those planning to remortgage or buy a home, many lenders have been cutting their fixed mortgage rates over the past few weeks, partly as a result of lower swap rates and in anticipation of further cuts to the base rate.

“Mortgage rates are on the downward trend, and those looking to lock in for longer will find the average five-year fixed rates are at their lowest point in six months (5.10% now vs 5.09% in November 24),” Springall noted.

“It is imperative borrowers consider all the costs and incentives on a mortgage, and not just be swayed by a headline-grabbing low-rate deal,” she added

It’s also worth bearing in mind that the mortgage market can be volatile and change quickly, depending on wider economic factors in the UK and further afield.

Cash ISAs remain popular

Elsewhere, savers continued to make the most of their tax-free ISA allowance as they entered the final weeks of the 2024/25 tax-year.

Savers deposited an additional £4.2 billion into cash ISAs in March, the largest sum deposited in a single month since the start of the tax-year in April 2024.

Notably, approximately £1 billion more was added into cash ISAs in March 2025 compared to March 2024, when savers deposited an extra £3.2 billion in these tax-free wrappers.

With last April seeing a major surge in ISA deposits as the new tax-year began, it seems likely that we will see yet another boost when April’s Money and Credit figures are released, particularly as rumours continue to swirl around possible cuts to the ISA allowance.