Borrowers are taking longer to pay off their mortgage as a percentage of their yearly earnings, but Northern Ireland is the first to experience the mortgage freedom day, the Halifax has said.
Across the UK, the so-called mortgage freedom day, which is when all new borrowers will have finally earned enough to pay off the yearly cost of their mortgage including capital and interest, was 18 April.
According to the Halifax, MFD this year occurred eight days later than in 2014, when it was 10 April.
However, for borrowers in some areas across Scotland and Northern Ireland, it came early. In Northern Ireland the average MFD was 19 March. For Scotland it was 22 March, 13 April for Wales and 18 May for England, where house prices are at the highest levels.
New borrowers in Renfrewshire recorded the earliest MFD of 28 February. Eight of the 10 earliest MFDs this year took place in Scotland, with Larne and Ballymoney in Northern Ireland taking the remaining two spots.
The lender claimed this was the result of net annual income decreasing by £15 since last year and the average annual mortgage repayment increasing by £613 over the same period.
Based on the average annual mortgage repayment cost of £7,567 and the average net annual income of £25,588, Halifax has calculated that those with a mortgage will have earned enough on 18 April to cover their mortgage payments for the rest of 2015.
Craig McKinlay, mortgage director at Halifax, said: “While monthly mortgage and rental costs account for the majority of many people’s household budgets, mortgage freedom day provides a different perspective on how much we spend on these costs over the course of a year.
“Our research shows that today, if people had put everything they had earned since the start of the year towards their mortgage, the average homeowner would be mortgage-free for the remainder of the year.”
Table title: First five regions to experience Mortgage Freedom Day in 2015
|Local Authority||Region||Mortgage freedom day|
|Renfrewshire||Scotland||28 February 2015|
|North Lanarkshire||Scotland||28 February 2015|
|West Dunbartonshire||Scotland||01 March 2015|
|Larne||Northern Ireland||02 March 2015|
|Inverclyde||Scotland||02 March 2015|
Dean Mason, principal mortgage adviser at Wiltshire-based Masons Financial Planning, said: “The Halifax research shows that the majority of borrowers are taking longer to pay off, which means it is even more important to make sure clients have their mortgage reviewed to get them the best possible rate.”