Mortgage payment date - early or late in the month??

polo2000w

My new repayment mortgage product is about to start and I need to let them know which date to take my mortgage payment. Interest is calculated monthly in arrears.

Am I right in thinking that I should try and pay as late as possible in the month as the date I choose to pay will not have any effect on the amount of the mortgage payment? If so, I could be getting interest for almost a month every month by keeping that mortgage payment in a savings account until I need to pay it?

space_rider

I have always paid 1st of the month as thats when all my DD`s are paid. I was told by the Halifax that the 1st is the best day to pay to pay the least interest.

Noz

space_rider wrote: »

I have always paid 1st of the month as thats when all my DD`s are paid. I was told by the Halifax that the 1st is the best day to pay to pay the least interest.

That is because on most Halifax mortgages their interest is calculated daily.

koexelek

Unusual for a lender to charge the interest monthly in this day and age.
Most lenders now charge it daily, which favours you, not them.

A lot of people get caught out on this, by selecting a mortgage by just looking at the interest rate.
However, in practice you might find that a mortgage with a 5.5% interest rate where the interest is calculated daily, actually has a cheaper monthly repayment that sometiing with a lower interest rate, but where the interest is calculated monthly or annually.