Hooray, it’s Mortgage Freedom Day
The 103rd day of the year is calculated by Halifax on the basis that all their earnings from 1 January are devoted to mortgage payments until the annual payments have been paid in full. The calculation includes both first-time buyers and home-movers.
But on average, renters spend an extra four weeks paying off the cost of their home – highlighting the high cost of renting compared with paying off a mortgage. Interest rates have been at a low of 0.5 per cent for three years.
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Hide AdHowever, different areas of the country have earlier Mortgage Freedom Days than others – with seven of the earliest ten taking place in Scotland.
Typical new home-owners in West Dunbartonshire earn enough to pay off their mortgage on 6 March – the second earliest in the country, followed by Renfrewshire, North Ayrshire and South Ayrshire on 7 March. The average mortgage freedom day for Scotland is 21 March – beaten nationally only by Northern Ireland, where it occurs five days earlier.
Nationally, there is only a few days difference between earliest and latest dates, as England’s is the last to take place on 16 April.
Craig McKinlay, mortgage director for Halifax, said: “For most home-owners, mortgage payments are the biggest outgoing every month; knowing they’ve earned enough to pay off 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.”