A new study has revealed the areas where homeowners are the most and least likely to pay off their mortgages.
The research, conducted by mortgage specialists at Bower Home Finance, examined data from the Office for National Statistics to determine the median house price and the median yearly salary for regions across England, Scotland, and Wales.
This information was then used to calculate how many years it would take two full-time median earners to pay off the mortgage on a median-priced home when spending 30% of their net monthly pay on mortgage repayments.
Lancashire's Findings:
Every Lancashire area featured in the study beat the UK average for mortgage repayment time.
Hyndburn is crowned the Lancashire area with the quickest mortgage repayment times. According to the research, homeowners in the Lancashire area can expect to pay off their mortgages in an average of 8.1 years.
It takes the average UK homeowner 20 years to clear their mortgage, according to the research, which means that property owners in Hyndburn could clear their mortgages nearly 12 years quicker than the average homeowner.
Hyndburn has a low median property price of £135,000, while workers in the Lancashire region earn a median salary of £34,987, which means that they can clear mortgage payments at a quicker rate.
Hyndburn has the fifth-quickest mortgage repayment time in the overall study.
Burnley homeowners have the second-quickest average mortgage repayment times in Lancashire. The research found that homeowners in Burnley can clear their mortgages in an average time of 8.2 years, which is nearly 12 years quicker than the average UK property owner.
Burnley appears in sixth place in the overall study and has some of the lowest property prices in the country, with a median house price of £130,000.
Blackpool is named as the Lancashire area with the third-quickest mortgage repayment time. Properties in the Lancashire town sell for a median price of £136,000, while workers earn a median salary of £31,858.
This means that property owners in Blackpool can pay off their mortgages in an average time of 9 years, which is 11 years quicker than the average UK homeowner.
Blackpool appears in tenth place in the overall study.
Property owners in Pendle can clear their mortgages in an average time of almost 10 years, which is nearly 10 years quicker than the average UK homeowner.
Homeowners in Blackburn have an average mortgage repayment time of 11.6 years, which is 8.4 years shorter than the average UK homeowner.
Properties in Blackburn sell for a median price of £170,000, with the average homeowner in the Lancashire town earning a salary of just over £33,000, which enables residents to clear their mortgages at a quicker rate than average.
Homeowners in Wyre take an average of 11.8 years to clear their mortgages, which is just over eight years quicker than the average UK property owner.
Homeowners in Preston can clear their mortgages in an average time of 11.9 years, which is almost eight years quicker than what it takes the average UK property owner.
Preston houses sell for a median price of £192,000, while residents in the Lancashire city earn a median salary of just over £37,200.
Rossendale is up next, with an average mortgage repayment time of 12 years. This is closely followed by Fylde, where homeowners have an average mortgage repayment time of 13.2 years.
Property owners in Chorley can clear their mortgages in 13.4 years, which is over 6 years quicker than the average UK homeowner.
Lancaster homeowners have slightly higher mortgage repayment times of 13.6 years, but this is still more than 6 years quicker than what it takes the average UK property owner.
Properties in Lancaster sell for a higher median price of £200,000, but residents in the city earn a median salary of almost £35,000.
Residents in South Ribble can clear their mortgages in almost 14 years. This is a higher figure than the Lancashire average, but still six years under the average UK mortgage repayment time.
Properties in South Ribble sell for a high median price of £218,000, with residents earning a median salary of almost £38,000.
West Lancashire has a mortgage repayment time of 16 years, which is four years below the national average time.
Ribble Valley has the highest mortgage repayment time in Lancashire, with a time of 17.8 years. However, this is still more than two years below the national average time.
Overall, it takes homeowners in the Northwest an average of 13.8 years to clear their mortgages, which is one of the lowest figures in the study.
The study's top 3 ranking:
According to the data, homeowners in Inverclyde are the most likely to pay off their mortgage. Properties in the Scottish region typically sell for a median price of £123,000, which is over 60% lower than the median UK house price of £310,919. Workers in Inverclyde earn a median salary of £36,650, which means that it’ll take the average homeowner in the region 6.9 years to pay off their mortgage.
Homeowners in East Ayrshire are the second-most likely to pay off their mortgage. Homes in the Scottish region sell for a median price of £128,500, which is almost 59% below the UK’s median property price of £310,919. Meanwhile, workers in East Ayrshire earn a median yearly salary of £37,968. Based on this data, property owners in East Ayrshire can expect to pay off their mortgage in around seven years.
Aberdeen City has the third-shortest estimated mortgage repayment time in the study. According to the data, homes in the Scottish city sell for a median price of £138,000, while workers in Aberdeen earn a median yearly salary of £40,020. This means that the expected mortgage repayment duration in Aberdeen is around 7.2 years.
At the other end of the scale, the study also highlights the regions where the average homeowner is unable to pay off their mortgage in their lifetime, based on the fact that the average first-time property buyer is now aged 34.
According to the data, 25 regions fall within this category, with all of these located in either London, the Southeast, or the East of England.
Chichester is identified among these regions. According to the data, the median house price in Chichester is £415,000, which is over 33% higher than the UK average. Despite the region’s high property prices, workers in Chichester actually earn below the UK average, taking home a median yearly salary of £35,264, which is nearly 11% lower than the median salary of £39,593.
Due to the region’s high property prices, the majority of homeowners in Chichester will be unable to pay off their mortgage in their lifetime.
St Albans is also named among the regions with some of the highest property prices in the UK. Properties in the city sell for a median price of £630,000. Even though workers in St Albans earn above the UK median salary, with a median salary estimate of £57,396, the city’s high property prices mean that homeowners in the region will realistically be unable to pay off their mortgage in their lifetime.
Similarly, homes in Kingston upon Thames sell for a median price of £538,000. With the average worker in the area earning a median salary of £46,871, this means that homeowners in Kingston upon Thames will be unable to pay off their mortgages in their lifetimes.
Other regions that are identified in this category include Windsor and Maidenhead, Hounslow, Hackney, Waltham Forest, Hillingdon, and Wandsworth.
The study also reveals that in 32 areas, mortgage repayments exceed the standard 40-year term.
Some of these regions include Cambridge, Buckinghamshire, Oxford, Brighton and Hove, and Winchester.
The study highlights that homeowners in Scotland can expect to clear their mortgages in the quickest time.
Overall, Scotland’s median mortgage repayment duration comes to around 10.5 years. While homeowners in Inverclyde can expect to pay off their mortgages in the shortest duration, property owners in East Lothian face the longest mortgage repayment duration in Scotland, taking around 19.8 years to pay off their mortgages.
Properties in the Northeast have the second-quickest mortgage repayment times overall, with a median mortgage repayment duration of nearly 11 years. County Durham is established as the Northeast area with the quickest mortgage repayment time of 9.1 years, while Newcastle has the slowest mortgage repayment duration of 14.2 years.
Property owners in Yorkshire and the Humber have the third-shortest mortgage repayment times in the UK, with a median mortgage repayment duration of nearly 13 years. Hull is identified as the region with the lowest mortgage repayment time of 9.5 years, while York has the highest mortgage repayment duration of over 21 years.
Other regions with the lowest mortgage repayment times include the Northwest, with a median mortgage repayment duration of nearly 13.8 years, and Wales, which has a median mortgage repayment time of 14 years.
London is established as the UK region with the highest mortgage repayment time. According to the data, only five regions in London had mortgage repayment times under 40 years.
The data reveals that 10 areas in London had mortgage repayment durations above 40 years, while a staggering 17 London regions had mortgages that would never clear within the average property buyer’s lifetime. The median mortgage repayment time in London is over 39 years.
The Southeast is home to the second-highest mortgage repayment duration in the UK, with the average property owner in the Southeast taking nearly 30 years to clear their mortgage.
The East of England has the third-highest mortgage repayment time in the UK. According to the data, homeowners in the East of England can expect to clear their mortgage in a median time of 26.5 years.
Geoff Charles, the CEO of Bower Home Finance, commented on the study and offered tips on how homeowners can reduce mortgage repayment times:
“It’s really staggering to see that house prices in London, the Southeast, and the East of England are so high that the average homeowner cannot afford to pay off the mortgage in their lifetime.
“The study highlights that properties in London sell for a whopping median price of £538,255, which means that homeowners are faced with incredibly long mortgage repayment durations.
“Similarly, homes in the Southeast sell for a median price of £382,250, while the East of England has a median property price of £345,000.
“What really stands out in the study is how much cheaper properties are in Scotland, with a median property price of £183,000.
“Out of the top 10 regions with the quickest mortgage repayment durations, Scotland dominates the ranking, highlighting just how much quicker property owners in Scotland can expect to pay off their mortgage.
“For homeowners in the UK who are struggling with long mortgage repayment durations, overpayments can be a really quick way to clear your mortgage in certain cases.
“A mortgage overpayment calculator can be a helpful way for you to establish how much to overpay to shorten your mortgage repayment duration.
“Before you make any overpayments, check that your specific lender allows you to do this penalty-free and if there are any particular overpayment limits in place. This is typically up to 10% of your outstanding mortgage balance per year.
“Most mortgage deals in the UK typically last between two and five years. After this, you will automatically be switched over to your lender’s Standard Variable Rate (SVR), which can be incredibly expensive due to interest rates.
“Because of this, it’s really important that you either choose a new deal with your current provider or switch to a new provider entirely.
“In certain cases, changing mortgage providers can make overpayments more flexible, helping to reduce your mortgage repayment time.”
