The average mortgage payment in Scotland dropped to £1,057 at the end of Q2 2025, down from over £1,200 per month at the end of 2023, according to findings from Rettie.
Rettie found that the average rent is now 15% higher than the average mortgage payment.
First-time buyer (FTB) activity picked up, with 6,990 mortgages issued in Q1 2025, a 15.7% year-on-year rise.
New mortgages for FTBs and homemovers increased by 22% in 2024 compared to the previous year.
Flexible mortgage schemes from providers like Halifax Intermediaries and Nationwide Building Society have supported lending.
Rettie reported that new affordability rules brought in during July will help keep lending up in 2025.
Bob Duncan, managing director at Rettie Financial Services, said: “After a challenging couple of years in the mortgage space, activity is picking up, buyers are returning, and lenders are becoming more competitive.
“It’s not a boom but, for the first time in a while, there’s a sense of stability.
“Sub 4 per cent deals are reappearing particularly for those with strong deposits or good credit.
“While affordability remains tight, it feels like we’ve moved past the interest rate peak.”
Some homeowners coming off fixed-rate deals in 2025 will see payments jump, moving from rates as low as 2% to 4.5% or above.
John Boyle, director of research and strategy at Rettie, said: “There are likely to be a few bumps in the road ahead as swap rates continue to influence the cost of mortgage lending.
“The longer term picture points towards gradual and modest improvements in lending conditions, which should boost market activity but not substantially.”
Boyle added: “Affordability remains stretched relative to long-term norms, with payments still consuming 30 to 40 per cent of average household income in Scotland’s largest cities.”
