Mortgage finance is at its most affordable for nearly three years, analysis from Stonebridge has found.

The mortgage and protection network’s latest Mortgage Affordability Index revealed that the average borrower’s mortgage accounted for 34.3% of their salary in September.

This is the lowest proportion recorded since November 2022, while the figure is also down from 34.6% in August and 40% the year previously.

Stonebridge said that falling mortgage rates, which are down 57 basis points to an average of 4.19% over the past 12 months, are the main driver behind the improvement in affordability.

However, rising wages, which increased by 4.75% in the year to September, have also made mortgage finance more affordable to the average borrower over the past year.

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.

Chief executive at Stonebridge, Rob Clifford, 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.

"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."

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