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Happy 'mortgage freedom day' - unless you live in London

Mirror logo Mirror 15/04/2019 James Andrews
a person standing in front of a brick building: We're free!© Getty We're free!

April 16 is "mortgage freedom day" - the date when borrowers will typically have earned enough money to cover their home loan payments for the whole year.

That's according to research from Halifax, which calculated that it now takes the average homeowner 106 days to earn enough to pay off the annual cost of their mortgage.

Since 2014, the date has moved back by just six days as wage growth and house prices have remained relatively stable across the period, it said.

Andy Bickers, mortgages director at Halifax, said: "If every penny earned this year went towards their mortgage, today would be the day that the average UK borrower could celebrate paying off their mortgage for the year."

Halifax also calculated "rental freedom day" - which it said will fall 10 days later than mortgage freedom day, on April 26. But while today's the day the mortgage is paid for the average homeowner, people in some parts of the country will have to wait far longer.

On average, Londoners need to wait an extra two months - until June 20 - for their mortgage freedom day. And residents of Brent have to wait longer still - with their "freedom" not arriving until September 5.

Watch: How to get the best mortgage deal

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By contrast, Copeland residents had their own mortgage freedom day months ago, on February 18, Halifax calculated.

Here are the dates for mortgage freedom day by region in 2019, according to Halifax:

  • North East, March 17
  • Yorkshire and the Humber, March 24
  • North West, March 22
  • East Midlands, April 7
  • West Midlands, April 14
  • East Anglia, April 18
  • South West, May 5
  • South East, May 22
  • London, June 20
  • Wales, April 1
  • Scotland, March 8
  • Northern Ireland, March 12

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Making it come earlier

If you're worried about how long you're spending just to cover the mortgage, then there's some good news.

Halifax assumes homeowners have 30% equity in their home using the current average annual mortgage repayment cost of £8,729.

That means finding a cheaper deal will see you bring your personal mortgage freedom day forward.

And how about the ultimate mortgage freedom? Well, you can bring forward your final ever payment - and become a homeowner outright - if you overpay on your bills.

Most lenders allow you to make extra payments to either £500 a month or 10% of the total outstanding balance without penalty each year.

The good news is that you could this AND save money by switching to the right deal.

A cheaper mortgage means you can make overpayments and still lower your total cost.

"With interest rates still low, there’s never been a better time to see for homeowners to see if they could be getting a cheaper deal,” said Daniel Hegarty, founder of digital mortgage broker Habito.

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