"Whilst Santa may struggle as he doesn’t have a regular income or payslips to prove it, for everyone else, the mortgage market is ending the year on a far more positive footing than it started"
- Richard Merrett - Alexander Hall
If Santa were taking out a mortgage on the North Pole today, lower borrowing costs would leave him more than £2,000 a year better off compared with the start of the year, a sum large enough to fund hundreds of additional toys.
Research from mortgage adviser Alexander Hall examined how mortgage costs have shifted through 2025 and applied those changes to a hypothetical scenario in which Santa secured a loan on his North Pole estate now rather than in January.
At the start of the year, the average mortgage rate stood at 4.07%. Using a valuation of just over £1 million for the North Pole, a 15% deposit of £152,246 would have left Santa needing to borrow £862,725. At January’s average rate, monthly repayments on that loan would have reached £4,587.
Improved borrowing conditions have since reduced the average rate to 3.7%. At that level, the same mortgage would now cost £4,412 a month, cutting repayments by £175.
Over a full year, that monthly saving adds up to £2,101. With the average toy costing £3.51 to produce, the reduced mortgage bill alone would cover the cost of almost 600 extra toys.
Key figures from the analysis include:
A drop in the average mortgage rate from 4.07% to 3.7%.
Monthly repayments falling by £175 on an £862,725 mortgage.
Annual savings of £2,101, equivalent to nearly 600 toys.
“This analysis is, of course, a bit of festive fun - Santa doesn’t have a mortgage,” said Richard Merrett, managing director of Alexander Hall. “However, it does highlight just how much mortgage market conditions have improved over the past year.”
“Rates have continued to ease, product availability has increased, and many lenders have enhanced their affordability assessments, meaning borrowers today may not only benefit from cheaper monthly payments, but in many cases can also borrow more than they could a year ago.”
“For buyers and remortgagers alike, this combination of lower rates and improved income-to-lending options is creating a much more supportive and flexible landscape,” he added.
“So whilst Santa may struggle as he doesn’t have a regular income or payslips to prove it, for everyone else, the mortgage market is ending the year on a far more positive footing than it started.”
