Today is Mortgage Freedom Day, when new borrowers will have earned enough to pay off the annual cost of their mortgage.
Halifax has calculated that 19 April is the date when homeowners will have earned enough on average to cover their mortgage payments for the rest of the year.
It is based on the average annual mortgage repayment cost of £7,968 and the average net annual income of £26,810.
However, the wide variation in house prices across the country means that Mortgage Freedom Day falls at different times of the year depending on the area.
Mortgage Freedom Day fell on 14 March in Scotland, the 15 March in Northern Ireland and the 23 March in Wales. In England, where house prices are on average higher, it does not fall until 27 April.
Homeowners in London have the longest to wait and don’t get to celebrate it until 27 June. Haringey homeowners don’t reach mortgage freedom until 6 September, preceded by those in Brent (30 August) and Camden (26 August).
In contrast, West Dunbartonshire in Scotland has the earliest Mortgage Freedom Day, with homeowners reaching it on 6 February.
Chris Gowland, mortgages director, Halifax, said: “Our research is a simple way of comparing mortgage and rent payments, quite often the largest financial commitment people make.
“Whilst 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.”
Halifax said that Rental Freedom Day, when tenants have earnt enough money to pay off all their rent, fell on 6 May this year.
Those in the North achieved rental freedom first this year on 6 April. Londoners have the longest to wait with tenants not achieving rental freedom until 29 July.
“As our research confirms, 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,” said Gowland.
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