Mortgage / Credit Card

kriss_boy

It just dawned on me. Since lloyds TSB dont recalculate the interest on my mortgage till year end I may as well keep my overpayments in a savings account till March and then pay it all at once.

But what if in March I pay off 4/5K of my mortgage with a 0% on purchases credit card? American Express even give me 5% cashback!

Anyone know if theres any fees for paying a TSB mortgage with a CC?

beecher2

Are you sure they only calculate the interest yearly? Most are daily. Most lenders won't allow you to use a credit card - phone them to see what they say. If the interest you're paying is less than that you'd get in a bank account, then you're best keeping saving though.

CloudCuckooLand

I could be wrong, but although the calculation might be done at year-end, don't they base the calculation on the exact times that you made any overpayments..?

Even a Govt owned bank doesn't expect you to lodge money with them and not get any effect from it for months.

i.e. Just like a savings account only adds interest once a year, you still know during the year that it is earning it, you just can't see it yet.

luckyfool

Lloyds calculate interest daily, even if the repayments might only be recalculated once per year. If you delay making the overpayments, you will pay more in interest.

kriss_boy

Maybe I missunderstood the Lloyds tsb but I phoned them about the interest as I had been overpaying all year.

I asked why my monthly repayment always ended in £514.42 each month... hinting that shouldnt it slowly decrease throughout the year.... ie... £514.37, £514.30, £514.25, £514.18, as you eat into the outstanding balance....

But I was told it was recalculated at year end...

dimbo61

Nice idea about the CC card but it will be treated as a cash advance and you will pay a fortune in charges so check with AE.
This has been asked already and some lenders ie YBS will not accept a mortgage payment from a credit card