New data from Stonebridge shows borrowers are now spending the smallest share of their income on mortgage repayments since late 2022.
Mortgage affordability has reached its most favourable point in nearly three years, according to the latest analysis from mortgage and protection network Stonebridge.
The network’s Mortgage Affordability Index found that the average borrower spent 34.3% of their salary on mortgage repayments in September. It is the lowest level recorded since November 2022 and marks a notable shift from the same time last year, when repayments accounted for 40% of income.
The improvement is being driven primarily by falling mortgage rates. Stonebridge reports that average rates have dropped by 57 basis points over the past 12 months, reaching 4.19%. Rising wages have added further support, increasing by 4.75% in the year to September.
Stonebridge’s index draws on a combination of official wage statistics, mortgage rate data and the network’s own loan information to assess the affordability position of the typical borrower. The network, one of the UK’s largest independent mortgage and protection firms, arranges more than £13 billion of loans annually.
MARKET CONDITIONS
Rob Clifford, chief executive at Stonebridge, said: “Mortgage affordability has improved significantly over the past year, reaching its most favourable level since late 2022.
“Falling mortgage rates, alongside rising wages, mean borrowers are spending a smaller share of their income on housing — a welcome relief for first-time buyers and those looking to move.
“Looking ahead, the Bank of England is expected to cut rates in December.”
He added that a shift in the wider rate environment may prompt lenders to sharpen pricing further. “While fixed-rate mortgages are priced off swaps rather than the base rate, a lower-rate environment could encourage lenders to bring more competitive deals to market.
“This suggests affordability could continue to improve into 2026, provided house prices don’t rise unexpectedly.”
A YEAR OF PROGRESS
Stonebridge’s month-by-month figures show a steady downward trend over the past year, despite some fluctuations. Mortgage costs peaked at 40% of salary in September last year before easing through the winter.
After a brief rise in the spring, the index continued its downward path through the summer, falling from 36.1% in July to 34.6% in August and then 34.3% in September.
The long-running average sits at 36.9%, placing the latest reading comfortably below the typical level seen over recent years.
With expectations of a Bank of England rate cut and continued competitive pressure among lenders, the coming months are likely to determine whether the recent improvement can be maintained into 2026.
