We’d like to remind Forumites to please avoid political debate on the Forum.

This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Putting lump sum onto mortgage

Hi,

I'm thinking of putting a small lump sum onto my repayment mortgage, to knock down the capital in one go, and was wondering when the 'best' time might be during the month (if the timing would make any difference to the balance/interest)?

My mortgage payment direct debit usuually comes out at the beginning of each month, and I intend to make the payment in cash over the counter.

Any ideas or comments? Thanks

Comments

  • You need to find out how your interest is calculated. If it's daily then whack it on straight away. If it's monthly ask your lender what date they use to calculate the interest then pay it in the day before.

    Remember if you're paying by standing order etc. to allow time for payment to clear.
  • Jonbvn
    Jonbvn Posts: 5,562 Forumite
    Part of the Furniture 1,000 Posts
    It depends whether your mortgage interest is calculated daily or yearly - check with your lender on this.

    If paid daily, make the payment ASAP. If yearly, make the payment just before the day they calculate the interest for the next year.

    I assume your mortgage rate is higher than any available ISA rate?
    In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:
  • Suzkin
    Suzkin Posts: 517 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    Thank you both!! Interest is calculated daily.

    The mortgage is less than £10k, but looking at the statement, most of my payment is going towards the interest, on a 14yr term. I'm determined to see the balance go asap, since it is so low.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 351.7K Banking & Borrowing
  • 253.4K Reduce Debt & Boost Income
  • 454K Spending & Discounts
  • 244.7K Work, Benefits & Business
  • 600.1K Mortgages, Homes & Bills
  • 177.3K Life & Family
  • 258.3K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.2K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.