Rent and Credit > First-Time Buyers Are Taking Out Record-High Mortgages

First-Time Buyers Are Taking Out Record-High Mortgages

Wollit Team2 minute read · Updated 17th December 2025

First-time buyers in the UK are now taking out the biggest mortgages on record. Even though mortgage rates have started to fall, the amount people need to borrow to buy their first home has continued to rise.

House prices remain high across much of the country, and while lower rates have helped bring monthly payments down slightly, they haven’t reduced the overall cost of buying a home. For many first-time buyers, that means borrowing more money and committing to a mortgage for longer than ever before.

This shift says a lot about how the housing market has changed — and why buying your first home today looks very different to how it did even a decade ago.

Why First-Time Buyer Mortgages Are Getting Bigger

There isn’t one single reason behind record-high mortgages. Instead, several changes have combined to push borrowing higher.

House prices are still high

While prices have cooled in some areas, they are still far above pre-pandemic levels. That means even a modest home often comes with a large price tag, especially in cities and popular commuter areas.

Deposits haven’t kept up

Saving a deposit has become harder as living costs have risen. Many buyers are putting down a smaller percentage deposit compared to the value of the property, which increases how much they need to borrow.

Longer mortgage terms are now normal

It’s becoming more common for first-time buyers to take out mortgages lasting 35 or even 40 years. Longer terms lower monthly payments, which helps people pass affordability checks — but they also increase the total size of the mortgage.

Falling rates make borrowing feel easier

Lower mortgage rates reduce monthly costs, which can make larger loans feel more manageable. This has encouraged some buyers to move ahead with purchases, even if the overall mortgage is bigger than they expected.

Together, these factors have pushed the average first-time buyer mortgage to record levels.

What Bigger Mortgages Mean in Practice

Taking out a large mortgage doesn’t mean first-time buyers are being careless. In many cases, people are making careful decisions based on what’s realistically affordable month to month.

That said, larger mortgages do come with trade-offs.

Borrowing more usually means:

less flexibility if bills or living costs rise
greater exposure if interest rates increase again in the future
a longer financial commitment overall

It also means there’s less room for error. When the loan is large, even small changes in circumstances — like job changes, unexpected costs or rate rises — can have a bigger impact.

How Lenders Are Responding

As mortgage sizes grow, lenders are paying closer attention to the wider financial picture. It’s no longer just about income and deposit size.

Lenders are increasingly focused on:

credit history and recent behaviour
existing debts and regular commitments
spending patterns and affordability
consistency and stability over time

This means preparing to buy a home now involves more than just saving. Showing that you can manage money reliably has become a bigger part of the process.

Why This Matters Even If You’re Not Buying Yet

Even if buying a home is still a few years away, record-high mortgages shape the market everyone is moving through.

They influence:

how strict lenders are
how long people stay in rental homes
how competitive buying becomes when rates fall
what “affordable” really means going forward

For people planning ahead, understanding these shifts can help set more realistic expectations about timelines, borrowing and preparation.

The Bigger Picture

Record-high mortgages aren’t the result of sudden risk-taking. They reflect a housing market where prices have risen faster than incomes and where buyers have had to adapt.

Buying your first home now often means borrowing more and committing for longer — and lenders expect stronger evidence that borrowers can handle that responsibility. Credit history, financial stability and consistent behaviour matter more than ever.

For anyone hoping to buy in the coming years, understanding how mortgage sizes have changed — and how lenders assess risk — is just as important as finding the right property.