New Mortgage Payments Take Highest Share of Borrower Income Since 2008
Homebuyers who took out purchase mortgages in 2025 committed an average 21.3% of their gross borrower income to their initial mortgage payments—the highest proportion since 2008.
The figure comes from UK Finance’s Loans Where We Live report, published on 5 May 2026. It is based on mortgages advanced to buyers during 2025 and shows how the payment burden differed considerably across the country.
However, the definition matters. The 21.3% figure describes the households that successfully obtained purchase mortgages. It is not a measure of how affordable an average-priced home is for every person hoping to buy, and it should not be compared directly with a single-earner affordability model.
The key findings
UK Finance reported that:
- 723,000 house-purchase mortgages were advanced in 2025, 17% more than in 2024
- initial payments absorbed an average 21.3% of borrowers’ gross income
- this was the highest national payment-to-income proportion since 2008
- North Norfolk recorded the highest local burden at 25.7%
- Hillingdon followed at 25.1%
- seven of the ten most affordable local authority areas were in Scotland
- London borrowers held the highest average mortgage debt, at £280,000
The growth in lending shows that more people completed home purchases during 2025. It does not mean that access to homeownership became easy.
Activity and affordability answer different questions: one tells us how many mortgages completed, while the other tells us how demanding those mortgages were relative to borrower income.
What does the 21.3% figure measure?
UK Finance compares the initial mortgage payments attached to new house-purchase lending with the gross income of the borrowers taking out those mortgages.
Gross income means income before tax and other deductions. The percentage does not include council tax, energy bills, maintenance, childcare, unsecured debts or the other costs that compete for a household’s take-home pay.
It is also an observed borrower measure. The households in the calculation made it through lender affordability checks and completed their mortgages.
People who could not borrow enough, decided the payment was unaffordable or remained outside the market are not represented.
The statistic therefore tells us how stretched successful buyers were at the beginning of their mortgage. It does not tell us whether the average home was accessible to the average individual earner.
Why our Mortgage Affordability Index shows a different percentage
The Find Me A Mortgage Affordability Index uses a deliberately different benchmark.
Our model asks:
How much of one median UK salary would be needed to meet the modelled payment on an average-priced UK home?
It assumes:
- one ONS median monthly salary
- the average UK house price
- a 15% deposit
- a 25-year repayment mortgage
- the Bank of England’s average new-mortgage rate for that month
For May 2025, the model used an average house price of £264,338 and assumed an 85% mortgage of approximately £224,687.
At the average new-mortgage rate of 4.47%, the modelled monthly payment was about £1,245.
Against one median monthly salary of £3,321.93, that produced a single-earner repayment burden of 37.48%.
The UK Finance figure of 21.3% and our figure of 37.48% are therefore not contradictory. They use different borrowers, incomes and assumptions:
- UK Finance measures borrower pressure: the payment burden carried by households whose mortgages actually completed.
- Our index measures access pressure: the modelled burden of an average-priced home against one median salary.
Actual borrower households may have two incomes, buy below the national average price, provide a larger deposit or select a different mortgage term.
Our model deliberately holds its assumptions constant so that changes in single-earner access pressure can be tracked consistently over time.
Why both measures are useful
The UK Finance measure tells us something important about the people buying homes: even among those able to proceed, initial mortgage payments took the largest share of gross borrower income since 2008.
Our single-earner measure exposes a different part of the affordability problem.
It includes the pressure facing an individual on median pay trying to support an average-priced home—even if that person might struggle to obtain the assumed mortgage in practice.
That difference matters politically and economically.
Looking only at completed mortgages can miss the aspiring buyers who remain in rented accommodation, depend on a second income or family support, move to a cheaper area or postpone buying altogether.
One measure describes the burden inside the market. The other tests the barrier to getting into it.
Affordability pressure varies sharply by location
UK Finance found that the highest initial payment burdens were concentrated in East Anglia and around London:
| Higher borrower payment burden | Initial payment as a share of gross borrower income |
|---|---|
| North Norfolk | 25.7% |
| Hillingdon | 25.1% |
| Luton | 24.9% |
| Slough | 24.8% |
| Spelthorne | 24.8% |
At the other end of the scale, buyers in East Ayrshire and Inverclyde committed 17.0% of gross income, while North Ayrshire recorded 17.2%.
A buyer in North Norfolk was therefore starting with almost nine percentage points more of gross income committed to the mortgage than a buyer in East Ayrshire or Inverclyde.
The findings reinforce the regional affordability divide, but they also demonstrate why a national average cannot describe every local market.
Property prices, earnings, deposits and buyer profiles all vary significantly by area.
What this means for buyers
For prospective buyers, the report underlines several practical points.
Lenders assess more than an income multiple
A calculation such as four or four-and-a-half times income is only a starting point.
Lenders may also consider existing debts, regular commitments, childcare, dependants, the mortgage term, the product rate and whether the household budget would remain resilient under pressure.
Our guide to how mortgage affordability is calculated by lenders explains why two applicants with similar earnings can receive different borrowing limits.
The monthly commitment matters more than the headline price
Two households buying similarly priced homes can face different payments because of their deposit, mortgage rate, loan-to-value and term.
Buyers should test the likely monthly commitment alongside the purchase price and leave room for the other costs of homeownership.
Location can change the calculation
The regional results show how strongly local prices and earnings affect the payment burden.
Buyers with flexibility over location may find that even a relatively short move changes the mortgage required and the pressure on their monthly budget.
For people buying their first home, our first-time buyer mortgage guide covers deposits, affordability checks, lender criteria and the wider costs involved.
Bottom line
UK Finance’s figures show that households taking out purchase mortgages in 2025 faced the highest initial payment-to-income burden since 2008.
Nationally, their initial mortgage payments consumed 21.3% of gross borrower income, rising above 25% in the most stretched areas.
Our Mortgage Affordability Index looks at the same problem from another angle. It tests how the modelled payment on an average-priced home compares with one median salary, revealing the access pressure faced by an individual earner rather than the average experience of households that completed.
Both perspectives point in the same direction: repayment burden remains one of the central weaknesses in the UK housing market.
But they measure different groups and should be presented as complementary indicators—not interchangeable percentages.
Check your mortgage options and speak to an independent mortgage specialist before making a full application.
Important information
This article is for general information only and does not constitute financial or mortgage advice. Mortgage products, eligibility, rates, fees and lending criteria vary by lender and may change over time. Always check the latest product details and speak to a qualified adviser before making a decision.
