Mortgage finance at its most affordable since last year 

Mortgage finance is at its most affordable level since the end of 2024, new analysis from mortgage and protection network Stonebridge shows.

Stonebridge’s Mortgage Affordability Index combines official wage and mortgage rate statistics with its own loan data to determine the relative affordability of mortgage finance in proportion to the average borrower’s earnings.

The latest data reveals that mortgage repayments accounted for 36.9% of the average borrower’s salary in March – down from 37% in January and February.

It means that mortgage finance is at its most affordable since December last year when mortgage repayments accounted for 36.5% of the average borrower’s salary. The long-running average is 35.9%.

The improvement in affordability in March was down to a slight uptick in wages and a marginal reduction in mortgage rates.

Stonebridge’s data shows the average consumer borrowed £194,372 for their mortgage in March – the highest amount since October last year and up 0.8% on the previous month. 

Average wages were up 0.5% on the previous month in March, according to the Office for National Statistics, while the average mortgage rate fell from 4.53% to 4.5% – the level it was at last November, according to Bank of England data.

Rob Clifford, chief executive at Stonebridge, commented: “Mortgage affordability improved slightly in March, but after a turbulent three years, even such modest progress matters. Our affordability index shows that stability is returning to the market, and with it, an appropriate sense of confidence. That shift in sentiment is just as important as the headline numbers.

“The good news is that the outlook for borrowers looks increasingly positive. The Bank of England’s recent rate cut — and that further cuts are very likely — has given lenders the confidence to reduce pricing even further. Several high street banks have launched sub-4% mortgage deals, and competition is increasing across the market and delivering consumer benefits.

“We’re still some way from a fully-fledged recovery in market activity, but momentum is clearly building. For brokers, any positive pricing and market news is always an opportunity to engage with existing customers and continue to strengthen that relationship – and deliver even better consumer outcomes.”