The Halifax has calculated that it takes the average new homeowner 103 days to earn enough to pay off their mortgage for the year. However Londoners have an additional month to wait before their day of freedom, which this year occurs on 11th May.
The research shows that today, the 13th April, is this year’s Mortgage Freedom Day in the UK; as on the 103rd day of the year new UK homeowners will have finally earned enough to pay off the annual cost of their mortgage.
Craig McKinlay, Mortgage Director, Halifax: “For most homeowners, mortgage payments are the biggest outgoing every month; knowing they’ve earned enough to pay their mortgage for another year should be a reassuring thought.
“These calculations also highlight the significant difference between buying and renting. If you rent your home, then every year, on average, you will need to do about a month’s extra work to cover the cost of renting compared to a mortgage.”
The long wait for freedom
In four local authorities, 2013’s Mortgage Freedom Day doesn’t arrive until after half of the year has passed. In London, Hammersmith & Fulham's new borrowers have to wait until 3rd July, nearly five months later than the earliest.
Nationally, there is only a few days difference between the earliest dates, as this year’s Mortgage Free Day occurred in Northern Ireland on the 16th March and in Scotland on the 21st March. England’s is the last to take place on 16th April.
- The UK’s Mortgage Free Day is calculated as the date when the average new borrower – covering both first time buyers and home movers – will have paid off their annual mortgage payments.
- It is calculated on the basis that all their earnings from the 1st January are devoted to mortgage payments until these annual payments have been paid in full.
