Mortgage approvals hit new low

Latest data from the Bank of England has shown that mortgage approvals fell sharply in May 2026, reaching their lowest level in two and a half years.

The data also showed a  14.9% decline, with approvals dropping to 56,205 from 66,034 in April.

Net borrowing of consumer credit by individuals remained largely unchanged when compared to April at £1.7 billion in May. This was slightly below the previous 6-month average of £1.9 billion. Within this, net borrowing through credit cards was £0.6 billion in May, down from £0.8 billion in April. Net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) increased to £1.1 billion in May, from £0.9 billion in April.

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk said “The slowdown in mortgage approvals across house purchases and remortgaging during May is a somewhat natural cooldown considering recent unrest in the mortgage market. The net mortgage approvals for house purchases during May of 56,200 below the six-month average of 63,300, with remortgaging approvals down to 33,300 in May from 51,200 in April.”

“It is worth noting that activity for remortgage business is expected to be busy this year, with many falling off cheap fixed rate deals. Last month saw the highest monthly figure for remortgage approvals in four years. The Bank of England approval data for remortgaging only captures those with a different lender, so not those refinancing with their existing mortgage provider, and many could be doing this to lock into a new rate early. Mortgage rates have started to come down from their April peaks, so hopefully this will slowly build up momentum in the months ahead, and no doubt borrowers will be hoping for more stability in the market. Those seeking a new deal are looking at repayments of £1,541 per month, based on a typical two-year fixed mortgage of 5.54% on a loan of £250,000, with a term of 25 years. This is a £750 difference over the course of 12 months, compared to the average rate of 5.12% back in June 2025.”