Mortgage market update | April 2025

March was another busy month in the mortgage market, with lenders continuing to make positive changes to borrowing criteria and the Bank of England making its latest interest rate decision. Here’s what you need to know this month.

Borrowing just got easier with NatWest

Getting on the property ladder isn’t just about finding the right home - it’s about being able to borrow enough to make it happen. The good news? NatWest has just improved its affordability calculations, meaning some buyers can now borrow more than before.

If you’re earning over £40K and borrowing between 75-90% LTV, you could now qualify for a loan-to-income (LTI) cap of up to 5x your salary. And if your income is over £75K (or £100K joint), this could increase to 5.5x salary - a big boost for those looking to step onto the ladder or move up.

If you’ve checked your borrowing limit before, it could be worth taking another look - there may be more available than you expected.

Stamp duty deadline has passed - what's the impact?

March was a frantic month for buyers trying to beat the stamp duty deadline, and now that it’s passed, we can see how it played out. With first-time buyers losing their higher tax-free threshold and the general exemption dropping back down, many rushed to complete in time, but not everyone made it.

Rightmove estimated that 74,000 buyers missed the deadline, including 25,000 first-time buyers, leading to an additional £142 million in stamp duty costs.

The surge in activity also meant a record number of property listings in March, with sellers hoping to take advantage of the increased demand.

Nationwide expand lending options

More good news for borrowers. Nationwide has improved its lending criteria, making it easier for more people to access mortgages. From March 17th, the building society has increased loan-to-value (LTV) limits for both interest-only mortgages and foreign national applicants.

Here’s what’s changed:

Interest-Only Mortgages - The maximum LTV has been increased to 75%, giving borrowers more flexibility.

Foreign Nationals (without indefinite leave to remain) - The maximum LTV has increased to 85% for:

• Sole applicants earning £50,000+

• Joint applicants earning £75,000+

• Plus, the requirement for a 25% deposit to come from personal savings has been removed, making it easier for buyers to fund their purchase.

These changes open up more options for buyers who previously found Nationwide’s criteria too restrictive. Another sign of lenders broadening their approach to help more people get on the property ladder.

Bank of England held rates at 4.5%

No surprises from the Bank of England this month - they’ve decided to keep the base rate at 4.5%, sticking to their cautious approach as they wait to see how inflation plays out.

Inflation ticked up to 3.0% in January, up from 2.5% in December, and the Bank expects it to peak at 3.7% later this year before gradually falling. With that in mind, they’re holding off on cutting rates for now.

For mortgages, this means we’re unlikely to see any major rate drops just yet. That said, lenders have been making changes, so if you’re looking at a new mortgage or remortgage, it’s worth checking what’s available.

Risk warnings

Your home may be repossessed if you do not keep up repayments on your mortgage