April 18 was officially ‘Mortgage Freedom Day’, according to research.
Last Saturday was the day on which the majority of home owners have so far this year had earned enough cash to pay their total mortgage repayments for 2015.
This is calculated using the average UK income and average mortgage repayment, and is a week later than 2014, when it fell on the 10th of April, according to the research that was carried out by Halifax PLC.
It is thought that the one week delay is down to a combination of wages (the average net income has fallen by £15 per year) and an increase in house prices. In monetary terms, for someone to make their 2015 mortgage payments in their entirety, they would need to have earned over £7,500 to date.
This is based on if a homeowner was to put every single penny they had earned towards their mortgage payments, and had borrowed around 70% of their property value. Halifax mortgage director Craig McKinlay said:
“Our research shows that today, if people had put everything they’d earned since the start of the year towards their mortgage, the average homeowner would be mortgage free for the remainder of the year.”
When looking at the whole of the UK, the date fluctuates in parts, based on house prices and average incomes for that area. Looking at the income of your customers is a key part of your role as a mortgage professional. You will have already completed your CeMAP training and passed the exam before being able to complete a detailed affordability calculation and advising on a mortgage solution.