Mortgages get 21% bigger

The size of the average new mortgage grew 21 per cent in 2004, Moneyextra has found.

15:57 10 January 2005

The size of the average new mortgage grew 21 per cent in 2004, Moneyextra has found.

As 2004 progressed house price inflation slowed, as did the number of mortgages transacted, but the average mortgage became larger.

Halifax, the country's largest mortgage lender, revealed on Friday that over the course of 2004 house prices rose 15 per cent, with 11 per cent of this rise coming in the first six months of the year.

At the same time the number of new mortgages approved fell to its lowest level for ten years in November, Bank of England statistics revealed.

Despite this, Moneyextra Mortgages today revealed that the average mortgage in December was 125,185.44, making the average loan size 20.96 per cent higher than it was the year before.

Additionally the average house prices being searched against by first-time buyers jumped 23.16 per cent to 152,660, Moneyextra found.

First-time buyers were also taking out loans for a greater percentage of the value of their property than at the start of the year.

While at the end of 2003 new homeowners were looking to loan 79.52 per cent of the value of the property, by the end of 2004 - and after four increases in interest rates - first-time buyers were looking to loan 84.70 per cent of the value of their property.

Moneyextra also revealed the most popular mortgage lender last month.

In this respect there was no change, Nationwide Building Society being rated the most popular lender for December and for the whole of 2004.