Is it your mortgage or rent freedom day?

publication date: Apr 21, 2016
 | 
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

Is it your mortgage or rent freedom day?

Those of us with a mortgage hit a significant milestone this week… according to the Halifax, at least.

Their latest report calculates Mortgage Freedom Day – the date in the year when we have all earned enough money ‘in theory’ to pay off the ‘average’ mortgage or rental bill. That’s assuming you plough all of your earnings into the mortgage and don’t spend a penny on other essentials such as food or fuel bills.

Read - How to Secure the Right Mortgage Checklist

Their data suggests:

  • Average income is £26,023
  • The annual mortgage cost to go with it is estimated to be £7,584

Using this data, they have calculated that the date ‘on average’ when you and I have earned enough to pay a full year’s mortgage is 19th April 2016 … a day later than last year’s Mortgage Freedom Day.

Rental Freedom Day comes a little later: that’s 5th May 2016.

But the startling thing from this data is how much it changes from one local authority and area to the next.

Read - How to Rent Checklist

So if you are in South Buckinghamshire in the South East for example, then it could take until 12th September to earn enough to cover your annual mortgage costs! Which doesn’t leave much of your salary to spend on other essential outgoings through the year.

However, move to West Dunbartonshire in Scotland and it’ll only take you until 21st February 2016; not even two months! Great views, too!

Read - Renting by the Room Checklist

In fact, eight out of the 10 earliest Mortgage Freedom Days occur north of the border, along with Copeland in the North West and Blaenau Gwent in Wales.

So how does the rest of the UK look and how does this compare to your own situation?

Nation

Mortgage Freedom Day

Scotland

12 March 2016

Northern Ireland

12 March 2016

Wales

01 April 2016

England

29 April 2016

UK

19 April 2016

 

Region

Mortgage Freedom Day

Yorkshire and the Humber

25 March 2016

North West

26 March 2016

North

27 March 2016

East Midlands

07 April 2016

West Midlands

13 April 2016

East Anglia

16 April 2016

South West

04 May 2016

South East

26 May 2016

London

26 June 2016

 

Region

Rent Freedom Day

North

05 April 2016

Yorkshire and the Humber

09 April 2016

North West

01 May 2016

East Midlands

13 April 2016

West Midlands

21 April 2016

East Anglia

22 April 2016

South West

22 May 2016

South East

16 May 2016

London

13 July 2016

UK

5 May 2016

Of course, all of these figures are based on those words I’ve come to dread: ‘on average’. As we all know, people’s circumstances vary wildly and few of us fit the ‘average’ mould.

However, Mortgage Freedom Day does raise awareness of the importance of reviewing your finances regularly. And, if you are interested enough to sit down with a calculator and do the maths, you may discover that your Mortgage/Rental Freedom Day is way off in the future. If this is the case, and if you’re not currently locked into a fixed rate, you might want to consider talking to your lender or mortgage broker to see if you can find a better deal.

Read - How to Secure the Right Mortgage Checklist

The figures are also based on homeowners with new mortgages, so if you’ve been paying yours off for many years already, even if you’re not in Scotland, it’s possible that your Mortgage Freedom Day will have quietly passed you by.


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Which? Property books and one of the UK's top property experts.
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