GeraCash / Mortgage affordability / Methodology
Gera Mortgage Affordability Ratio — Methodology
A fully reproducible, public formula computed from HM Land Registry house prices, ONS ASHE earnings, and Bank of England Bank Rate. Every number traces to an official OGL-licensed UK government source.
Important: Illustrative context only
The GMAR and monthly repayment figures on this site are illustrative context, not financial advice and not a mortgage offer. The income multiple (×4.5) and repayment calculation use an open reference rate (Bank of England Bank Rate 3.75%) and a standard research multiple — they do not quote any specific named lender's product, offered rate, or stress test. Actual mortgage eligibility and repayments depend on your individual circumstances, lender criteria, and market conditions. Always consult a regulated mortgage adviser (FCA register).
What is the Gera Mortgage Affordability Ratio (GMAR)?
The Gera Mortgage Affordability Ratio (GMAR) is a Gera-computed index that measures how many times the local median income a buyer would need to borrow — at a standard 4.5× income multiple — to purchase a typical property in a local authority.
A GMAR of 1.0 means the property price equals exactly 4.5× median income (the maximum illustrative borrowing). A GMAR below 1.0 means the typical property is within reach at standard lending multiples. A GMAR above 1.0 indicates a shortfall — the buyer would need either a larger deposit or a higher income.
The GMAR is intended for geographic comparison and context — it is not an eligibility check, not a mortgage offer, and not a recommendation.
Formula (reproducible)
# Step 1: GMAR
GMAR = average_price / (median_income × lend_multiple)
= average_price / (median_income × 4.5)
# Step 2: Illustrative monthly repayment (capital + interest)
loan = average_price × 0.75 // 75% LTV (illustrative)
r = 3.75 / 100 / 12 // BoE Bank Rate, monthly
n = 25 × 12 = 300 // 25-year term, months
monthly = loan × r × (1+r)^n / ((1+r)^n − 1)
# Affordability categories
GMAR <= 3.0 → 'Affordable'
GMAR <= 5.0 → 'Stretched'
GMAR <= 7.0 → 'Unaffordable'
GMAR > 7.0 → 'Severely unaffordable'
The lend_multiple of 4.5× is the value commonly cited in ONS housing affordability reports and housing research as a typical ceiling for mortgage borrowing. It is an industry convention used here for comparability — it is NOT the criteria or product of any specific lender, nor a stress test rate. Different lenders may offer more or less depending on individual affordability assessment.
Data sources (all OGL v3.0 / open)
1. House prices
HM Land Registry — UK House Price Index (full file, April 2026). Published 18 June 2026. Reference period: April 2026 (snapshot taken 20 June 2026; the UK HPI back-revises monthly, so every price below is pinned to this stated vintage). Column used: AveragePrice — a mean, not a median — (all property types, all buyer types) filtered to English local authority area codes (E06/E07/E08/E09 prefixes). OGL v3.0.
2. Median income
ONS Annual Survey of Hours and Earnings (ASHE) — Table 8.7a (2025 provisional). Released 23 October 2025. Reference period: April 2025 (provisional). Sheet: All; column: Median (median gross annual pay, all employees, place of residence). ONS suppresses unreliable cells (CV >20% or disclosed as x) — those LAs are excluded from the dataset. OGL v3.0.
3. Bank Rate (illustrative reference)
Bank of England — Bank Rate (June 2026 MPC decision). Bank Rate as at June 2026: 3.75%. Used only as an illustrative reference rate for the monthly repayment estimate. Actual mortgage rates depend on lender, product, LTV, and individual circumstances. The BoE Bank Rate is not the rate at which mortgages are offered commercially. OGL v3.0.
Worked example
Local authority: Burnley (most affordable in dataset)
1. Average (mean) house price (HMLR HPI, April 2026): £129,556
2. Median gross annual income (ONS ASHE, April 2025): £29,680
3. GMAR = £129,556 / (£29,680 × 4.5) = £129,556 / £133,560 = 0.97
4. Loan = £129,556 × 0.75 = £97,167 (illustrative 75% LTV)
5. Monthly r = 3.75% / 12 = 0.003125
6. Monthly repayment = £97,167 × 0.003125 × (1+0.003125)^300 / ((1+...)^300 − 1) = ~£500/month (illustrative)
7. Category: GMAR 0.97 ≤ 3.0 → Affordable
What the GMAR does NOT include
- Lender-specific stress rates: Each lender applies its own affordability stress tests at rates above the actual pay rate. The GMAR uses the BoE Bank Rate purely as an open reference — not as a lender product rate. Do not use this figure as your actual mortgage rate.
- Deposit / LTV variation: The 75% LTV assumption is illustrative. A buyer with a larger or smaller deposit will face different monthly repayments and different lender eligibility.
- Other mortgage costs: Arrangement fees, product fees, survey, solicitor costs, Stamp Duty (SDLT), and insurance are not included.
- Household income vs. individual income: The ASHE figure is median individual gross pay — a household with two earners may have significantly higher combined income.
- First-time buyer schemes: Help to Buy, Shared Ownership, First Homes, and Lifetime ISA bonuses are not modelled.
Contains public sector information published by HM Land Registry and licensed under the Open Government Licence v3.0. Source: HM Land Registry — UK House Price Index (full file, April 2026) (April 2026, published 18 June 2026).
Contains public sector information published by Office for National Statistics and licensed under the Open Government Licence v3.0. Source: ONS Annual Survey of Hours and Earnings (ASHE) — Table 8.7a (2025 provisional) (April 2025 (provisional), published 23 October 2025).
Contains public sector information published by Bank of England and licensed under the Open Government Licence v3.0. Source: Bank of England — Bank Rate (June 2026 MPC decision) (June 2026, published 19 June 2026).