Today marks ‘Mortgage Freedom Day’ for UK homeowners
Based on the average annual mortgage repayment cost of £7,968 and the average net annual income of £26,810, Halifax calculated that today the average homeowner will have earned enough to cover their mortgage payments for the rest of 2017.
For London borrowers, mortgage freedom day falls on 27 June, but homeowners in Scotland marked the day on 14 March.
Homeowners in Northern Ireland reached mortgage freedom day on 15 March and in the North and Yorkshire and Humber on 25 March.
At local authority district level, new borrowers in West Dunbartonshire, Scotland, reached ‘mortgage freedom’ first on 26 February 2017.
Halifax also looked at ‘Rental Freedom Day’ which varied across the country. Tenants in the North achieved ‘rental freedom’ first this year on 6 April, followed by Yorkshire and the Humber (7 April) and Scotland (13 April). Once again, Londoners have the longest to wait with tenants not achieving ‘rental freedom’ until 29 July.
Chris Gowland, mortgages director at Halifax, said: “Our research is a simple way of comparing mortgage and rent payments, quite often the largest financial commitment people make, across the UK using average regional earnings.
“While it excludes other living costs, the research highlights a divide between the North and the South, with those in the South having to wait longer to reach ‘mortgage freedom’ than their counterparts in the North.
“Homeownership is still cheaper than renting. ‘Rental Freedom’ Day falls 17 days after ‘Mortgage Freedom’ Day, showing that despite barriers to property ownership, homeowners are still better off than renters.”