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UK homeowners celebrate ‘mortgage freedom day’

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Today marks 'mortgage freedom day', the day typical homeowners will have earned enough to pay off the annual cost of their mortgage, according to data from Halifax.

However, it is not good news for all UK buyers.

Homeowners in the South East will have to wait until 2 May, while for the average buyer in the capital, mortgage freedom day does not come until 20 May.

The figures also show renters will have to spend an extra four weeks at work to have earned enough to pay off the annual rental costs – the equivalent day for them will not arrive until 12 May.

Halifax’s calculations are based on the average annual mortgage repayment cost of £6,954 and the average net annual income of £25,603.

The lender said mortgage freedom day 2014 comes three days earlier than last year and five days earlier than it was five years ago.

It attributed this to a £2,153 increase in net income and a £357 rise in average annual mortgage repayments over the same period.

Armagh in Northern Ireland has the earliest mortgage freedom day – 13 February – while owners in Haringey, Kensington and Chelsea, Camden and Hammersmith and Fulham will have to wait until July.

Craig McKinlay, mortgage director at Halifax, said: “While monthly mortgage and rental costs account for the majority of many people’s household budgets, mortgage freedom day provides a different perspective on how much we spend on these costs over the course of a year.

“Our research shows that today, if people had put everything they’d earned since the start of the year towards their mortgage, the average homeowner would be mortgage free for the remainder of the year, which is a reassuring thought.”



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