Mortgage repayments: How much is too much?

People who spend more than 30% of their earnings on their mortgage have been branded ‘cost burdened’ and are being urged to consider relocating.

According to Comparethemarket.com, studies suggest spending less than this amount as a proportion of your monthly income on the mortgage – or indeed rent – will guarantee you a good standard of living.

But anyone devoting more of their earnings than this mean you could face affordability problems.

It will come as no surprise those living in London are saddled with the biggest ‘cost burden’ when it comes to paying the mortgage. A study by Comparethemarket.com found Londoners were giving up 59% of their earnings to afford a home in the region.

Meanwhile, at the other end of the affordability scale, those living in Glasgow spent only 19% of their salary on their mortgage repayments.

Average salary

A spokesperson for Comparethemarket.com said: “This research revealed just how difficult it is for single people in the UK to buy a place of their own.

“Taking into consideration the average monthly household income and average monthly mortgage repayment, the most affordable location to settle down is in Aberdeen.

“Yet owning a property in this Scottish city would still require single residents to spend a shocking 38% of their salary on mortgage repayments, 8% more than the minimum recommended amount.”

The study also revealed, when taking into account the average salary, the average single person owning a home in London or Brighton would need to spend over 110% of their income on their mortgage.

For anyone looking at getting onto the property ladder, the message is to look for locations which offer the best affordability. You can find out more about which regions offer house prices or rent which come in below the 30% benchmark by clicking here.

Where to buy a home (Source: Comparethemarket.com)