Have you reached your Mortgage Freedom Day?

Homeowners in the UK have by now on average earned enough to cover their mortgage payments for the rest of 2018, according to research from Halifax.

‘Mortgage Freedom Day’ fell on April 16 this year, the bank said, three days earlier than last year. This date marks the day UK homeowners can typically expect to have earned enough to cover their annual mortgage bills. Calculations are based on the average annual net income of £27,724 and assume average annual mortgage costs of £8,039 for a new borrower who has put down a 30% deposit to buy their home.

Renters need to work an extra 17 days to pay off their annual rental costs, reaching ‘Rental Freedom Day’ on May 3.

Andy Bickers, mortgages director at Halifax, said; “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.”

Regional variations

Areas of the UK where house prices are lowest reach Mortgage Freedom Day much earlier than in areas where property prices are steepest.

In London, for example, homeowners won’t reach their Mortgage Freedom Day until June 13. In Brent, North London, homeowners will have to wait until August 11 before they’ll have earned enough to cover their annual mortgage costs. Those in Haringey and Harrow also face a two month wait before they’ll reach their Mortgage Freedom Days on August 9 and July 30 respectively.

Homeowners in Northern Ireland reach Mortgage Freedom Day the earliest, having typically earned enough to cover annual mortgage bills by March 10, two months earlier than homeowners in England who on average reach Mortgage Freedom Day on May 9.