Cost of living · Fictional household · England · 2026/27

Paying a mortgage: what is left each month?

Marcus & Helen (38 & 36 · children aged 8 & 12 · homeowners). In this example £4,223 comes in each month and £3,453 goes on housing, bills and debts, leaving £770. A fictional household, built from 2026/27 rules and stated assumptions.

Evidence last reviewed 29 October 2026

Illustration of a fictional household, not a photograph of real people.

38 & 36 · children aged 8 & 12 · homeowners

Meet Marcus & Helen

Their own home. A mortgage that takes a bigger bite.

Marcus earns £40,000 and Helen £20,000 a year. They own their home with a £220,000 repayment mortgage and 25 years remaining. At an assumed 4.5%, the payment is £1,223 a month. Their earnings and family size match Dan and Tracey’s example, making the different housing bills easier to compare. They are a separate family.

A month in pounds

Marcus & Helen: a month, in pounds

England · 2026/27 rules · fictional household · every line is listed below

Left each month

£770

Still to cover leisure, holidays, emergencies and any saving.

Money coming in

Marcus · take-home pay£40,000/year gross; modelled tax, NI and workplace pension deducted: £2,581
Helen · take-home pay£20,000/year gross; modelled tax, NI and workplace pension deducted: £1,447
Child Benefit · two childrenPublished 2026/27 rates; assumed claimed; no high-income charge in this example: £195
Total: £4,223

Housing and bills

Mortgage · 4.5%, 25 yearsScenario assumption: −£1,223
Food & household shoppingScenario assumption: −£620
Energy & waterScenario assumption: −£210
Council taxScenario assumption: −£180
TransportScenario assumption: −£400
Phones & broadbandScenario assumption: −£80
Children, clothes & clubsScenario assumption: −£250
Insurance & other essentialsScenario assumption: −£110
Home maintenance reserveScenario assumption: −£150
Total: −£3,223

Debt repayments

Car finance · family carScenario assumption: −£230
Total: −£230

What would change it

On the same balance and remaining term, 2% would mean £932/month. Moving to 4.5% adds £290/month. An actual refix depends on the balance and term at that date.

Compare with Dan & Tracey: social renting with two children →

What Budget 2026 could mean for them

These are announcements with dates and conditions, not money already in the budget above. None of them is added to Marcus & Helen’s month.

Household Energy Payment
£100 off council tax from January 2027, only if their home is in bands A to D.
As announced: Household Energy Payment: £100 council tax rebate for bands A-D from January 2027. Who it covers: Payment: households in England in council tax bands A–D, up to 20 million of them; the devolved governments receive a Barnett share and decide its use. VAT cut: domestic electricity across the UK..
The measure Is it happening?
Support for Energy Bills
No VAT on electricity from October 2026 to July 2027.
As announced: Support for Energy Bills: Cut VAT on domestic electricity from 5% to 0% from 1 October 2026 to 1 July 2027. Who it covers: Payment: households in England in council tax bands A–D, up to 20 million of them; the devolved governments receive a Barnett share and decide its use. VAT cut: domestic electricity across the UK..
The measure Is it happening?
Fuel Duty
The 5p fuel duty cut stays until July 2027.
As announced: Fuel Duty: Extend the temporary 5p-per-litre duty cut and defer the planned Retail Prices Index (RPI) increase to 1 July 2027.
The measure

The Treasury’s average, shown separately

The Treasury estimates households in income group 4 of 10 (1 is the lowest) gain about £53 a year on average from Budget decisions (2027-28), counting tax, benefits and public services. That is an average for households with a similar income and make-up, not Marcus & Helen’s own gain, so it is not added to their month.

Budget 2026 explained · Budget tracker

Assumptions, workings and sources

Assumptions. The £220,000 balance, 25 years remaining and 4.5% rate are assumptions, not a lender offer or a national average. The payment includes capital as well as interest; the capital builds their share of the home. The deposit and buying costs are outside this monthly budget. £150 a month is set aside for repairs. Debts: assumed car finance. No paid childcare.

Benefits and support. Child Benefit for two children is included at the published 2026/27 rates; neither parent earns over £60,000, so no High Income Child Benefit Charge applies. Universal Credit and other means-tested support are not included, and whether the household could get any has not been assessed. Amounts are before any such support.

What is official and what is assumed. Pay after tax, National Insurance, workplace pension, student loans and benefit rates follow the 2026/27 rules for England (official statistic, checked 2026-10-29). Every line marked “Scenario assumption” is an amount chosen for this example. Marcus & Helen are not typical of any group, and one example cannot show how a whole group is doing.

The workings, to the penny

A month, 2026/27. Yearly amounts ÷ 12; weekly rates × 52 ÷ 12. Money going out is shown with a minus sign.
Line	Exact amount
Marcus · take-home pay	£2,580.77
Helen · take-home pay	£1,447.43
Child Benefit · two children	£194.78
Total coming in	£4,222.98
Mortgage · 4.5%, 25 years	−£1,222.83
Food & household shopping	−£620.00
Energy & water	−£210.00
Council tax	−£180.00
Transport	−£400.00
Phones & broadband	−£80.00
Children, clothes & clubs	−£250.00
Insurance & other essentials	−£110.00
Home maintenance reserve	−£150.00
Car finance · family car	−£230.00
Total going out	−£3,452.83
Left each month	£770.15

Sources

Who they are