standing order

wayne

hi,i was wondering if anyone knows of any pitfalls if i put my mortgage on standing order instead of direct debit.my thinking is>>>i get paid 4 weekly so if i put it on standing order to go out each pay day i,ll be paying an extra payment a year.i have checked my mortgage to make sure it is ok to overpay without incurring cost for finishing early and it,s ok.also bank have said they are happy for me to pay on standing order so i,m set to go ahead but thought i,d ask you knowledgable people if there is any downside to this before i go ahead.

Kaz2904

The only downside to this is if you are on a flexible mortgage and the rates go up, you have to remember to adjust your payment upwards in that event. If you are confident you can remember to do this or you are on a fixed rate then it's a tiny problem really.
I've paid my mortgage by standing order for years because when I initially tried to set up the direct debit it failed so I did it online from my end and have never had a missed payment since. I had 2 missed payments when I was paying by direct debit (for some unfathomable reason). Luckily the building society were very good about it and when I had a letter a week later to say I'd not paid I phoned and paid by card each time.
With the SO, I'm in control.

Floxxie

I can't think of any pitfalls except the one that kaz2904 mentioned. I was going to say that you could cancel it in error but then you could with a DD.

I'm planning to pay by SO next year as I can set the amount I pay to be higher than the regular payment and not have to think about it (unless rates go up). It also means I can pay on the date I want, not what the bank has chosen for me!

Floxxie

zekepes

I pay by standing order. I pay £1500/month on a mortgage of around £980/month.
I would only pay by SO if I knew that my payment would more than cover the required amount.

LumpyCustard_2

I pay my overpayment by standing order, but the mortgage itself by direct debit. The only problem I find with the standing order is that it takes 3 days to go through and be credited to my mortgage account, whereas the direct debit goes straight in. I think however this might change in the next few months as banks are speeding up their transaction times.

Bargain_Rzl

LumpyCustard wrote: »

I pay my overpayment by standing order, but the mortgage itself by direct debit. The only problem I find with the standing order is that it takes 3 days to go through and be credited to my mortgage account, whereas the direct debit goes straight in. I think however this might change in the next few months as banks are speeding up their transaction times.

That's just what I was going to say. I imagine you need to be very careful to ensure that your monthly payment reaches the bank on the day it's supposed to, or you risk a few things - having "late payments" on your record; something going through a day early and leaving you open to penalties for making two payments in the same month...

I would happily set up a standing order for my o/ps but not my regular ones.

StuartGMC

We overpay by Direct debit without problems (NatWest) and can raise it any time, plus make ad hoc overpayments as well to the offset mortgage. Money transfers immediately. Have you spoken to the bank if tey can do likewise?

If rates rise, NatWest advise no need to raise the payment, but I can always telephone to do so and it is very quick.