Payments for both first-time buyers and home movers accounted for just 27% of average incomes in the second quarter of this year, marking the lowest proportion seen since 1999, Halifax found.
Lenders slashing their mortgage rates, along with house prices having fallen in recent years, were said to be the main factors behind improved affordability.
The findings for a potential new borrower entering the market are well below the average 36% share of mortgage payments recorded as a proportion of income which has been seen over the last 30 years. Mortgage payments reached a peak of 48% of income in 2007.
On a regional basis, mortgage payments were found to be lowest as a proportion of income in Northern Ireland, which has seen sharp falls in house prices following the market crash. Payments there for a new borrower made up just 17% of income.
Mortgage payments were also found to be particularly low in relation to earnings in Scotland, where the figure was 19%, while in Yorkshire and the Humber it was 22% and in the North West it was 23%.
On a local level, Camden in north London was named as the least affordable district in the UK, with mortgage payments there costing 53% of income. East Ayrshire in Scotland and Omagh in Northern Ireland were the most affordable, with mortgage payments in both areas costing just 14.7% of earnings.
A Government scheme called Funding for Lending was launched one year ago, which prompted a flurry of lenders to slash their mortgage rates to some of their lowest ever levels.
However, some of these rates also come with hefty fees, which borrowers need to take into account when working out the best deal. The scheme gives lenders access to cheap finance in order that they pass the benefits on to borrowers.
The findings come at a time when the housing market has been bursting into life, with a string of reports saying activity is lifting.
However, many of these reports have also said that house prices are back on an upward march, meaning that some mortgage borrowers face having to stretch themselves further in the coming months.
Craig McKinlay, mortgage director for Halifax, said: "Substantial mortgage rate reductions and lower house prices have led to a significant improvement in mortgage availability since the peak of the housing market six years ago.
"The Funding for Lending scheme has helped lenders to cut mortgage rates, causing a further modest improvement in affordability over the past year, despite the modest rise in house prices nationally."
Halifax used a combination of its own database as well as a range of other sources to make the findings, which are based on someone having a 30% deposit and paying off both the capital and interest on their mortgage.
Housing Minister Mark Prisk said: "This is another clear sign that the housing market has turned a corner, alongside new figures showing the numbers of new homes started up by a third compared to last year, and the numbers of first time buyers at their highest since 2007."