Today is the day UK homeowners will have earned enough, on average, to pay off their mortgage for the rest of the year.
Today is the day UK homeowners will have earned enough, on average, to pay off their mortgage for the rest of the year.
Dubbed UK Mortgage Freedom Day by Halifax the date has fallen three days earlier than last year and it comes 17 days before tenants would be able to pay off their annual rental costs.
Experts say the day provides a great opportunity for borrowers to think about the cost of their mortgage and how much the repayments are impacting their finances.
Halifax used the average annual mortgage repayment cost of £8,039 and the average net annual income of £27,724 to make its calculations and identify the date when UK homeowners would have earned enough to cover payments for the rest of 2018.
However, it also detected regional variations. Those in the North, Yorkshire and Humber and the North West reached their Mortgage Freedom Day in March. Londoners, meanwhile, would have to wait until 13th 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.
“Homeowners are overall better off than renters, with ‘Rental Freedom’ Day falling more than two weeks later for the second year running.
“First-time buyers in particular are saving £900 a year buying a home than renting.”
Meanwhile, Ishaan Malhi, CEO and founder of online mortgage broker Trussle, said some homeowners would be alarmed to find out how much of their working life was spent earning enough to pay for their home.
He added: “What the day also 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 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.”
