UK homeowners reach ‘Mortgage Freedom Day’ this week
New borrowers ‘celebrated’ UK Mortgage Freedom Day on Monday 16th April, the day they will have earned enough to pay off the annual cost of their mortgage.
Halifax revealed that it would take until this week for the average homeowner to have earned sufficient to cover their mortgage payment for the rest of 2018.
This is based on the average annual mortgage repayment cost of £8,039 and the average annual income of £27,724.
But if you are based in the South of England you may have to wait a little longer, as the UK average masks some wide regional differences.
North-South mortgage divide
There’s a gap of two months between when homeowners in Northern Ireland ‘celebrate’ on 10th March compared to those in England on 9th May.
And the divide is even greater across the regions, with those in the North, Yorkshire and Humber and the North West all reaching Mortgage Freedom Day in March, while Londoners have to wait until 13 June.
Andy Bickers, mortgages director at Halifax, said: “Despite only a small shift, borrowers this year have on average earned enough to meet their mortgage payments for the rest of the year three days earlier in 2017 – a positive step considering a mortgage is often the greatest financial commitment we make in a lifetime.
Ishaan Malhi, CEO of Trussle, added: “Mortgage Freedom Day shows is the importance of being on the right mortgage, so that you can keep your payments as low as possible and spend your salary on other worthwhile things in life.
“Today there are two million UK homeowners sitting on a costly Standard Variable Rate deals because they haven’t switched at the end of a fixed term. Each could save more than £4,500 a year in interest payments – two months’ worth of salary for the average person in the UK – by switching to the most competitive deal on the market.”