Mortgage as % of Take-Home Pay
The 35% rule of thumb: total housing cost (mortgage + insurance + maintenance) should be under 35% of net income.
Updated May 2026, using HMRC 2026/27 rates and current ONS / gov.uk figures.
UK lenders stress-test affordability at higher rates (currently around base rate + 1%). Independent of lender rules, the personal-finance heuristic is to keep total housing spend at or below 35% of take-home.
Worked examples
Net income £40k, mortgage £1k/mo (£12k/yr) = 30% — comfortable.
Net income £40k, mortgage £1.4k/mo (£16.8k/yr) = 42% — stretched.
Frequently asked questions
Why net rather than gross?
Because gross income overstates spending power for higher-rate payers.
Should I include council tax and insurance?
If aiming for the 35% guideline, yes — total housing cost. Lenders typically use mortgage payment alone for stress tests.