Halifax has claimed that today – 19 April – is this year’s UK Mortgage Freedom Day, the day when new borrowers will have earned enough to pay off the annual cost of their mortgage.
Based on the average annual mortgage repayment cost of £7,584 and the average net annual income of £26,023, Halifax has calculated that homeowners with a mortgage will have today earned enough on average to cover their mortgage payments for the rest of 2016.
Mortgage Freedom Day this year occurs one day later than in 2015 (18 April), and is the result of average annual mortgage repayment edging up by £17 during the year. Rental Freedom Day, on the other hand, comes 16 days later on the 5th May – again a day later than in 2015.
There is a wide variation in Mortgage Freedom Day across the country, with home owners in Scotland and Northern Ireland achieving this on 12th March, followed by Yorkshire and the Humber (25th), the North West (26th) and the North (27th). Mortgage Freedom Day for Londoners doesn’t arrive until 26th June – three months later than in northern England.
Regionally, the North was the first to achieve Rental Freedom Day (5th April) this year, just ahead of Yorkshire and the Humber (9th April) and the East Midlands (13th April). Tenants in London have to wait until 13th July.
Craig McKinlay, Mortgage Director, Halifax, said: “For most homeowners, mortgage payments are the biggest outgoing every month; knowing they’ve earned enough to pay off their mortgage for another year should be a reassuring thought. On the other hand, those who rent will need to work a further couple of weeks to have earned enough to cover their annual rental cost.”
At local authority district level, new borrowers in West Dunbartonshire recorded the earliest Mortgage Freedom Day in 2016, on 21st February. Eight of the 10 earliest Mortgage Freedom Days this year take place in Scotland, including Inverclyde and East Ayrshire (both 23rd February) and North Lanarkshire (25th February). The remaining two local areas are Copeland in Cumbria (27th February) and Blaenau Gwent (2nd March).