repaying mortgage weekly instead of monthly

imported_Ducklet

Was wondering if anyone is aware of being able to pay a mortgage weekly instead of monthly. I have heard this can result in considerable savings in interest payments. Does anyone have any other info on this?

mountainofdebt

I've never thought of that but I guess if you had a mortgage where the interest is calculated daily then I suppose you would wouldn' you????

I know when I was discussing with my mortage company the very small overpayments that I had made, they told me that although it would affect the amount of interest I would pay it wouldn't affect the monthly direct debit ... eg if I paid £12.50 over what they would be expecting then the direct debit for the next month would be £12.50 less (does that make sense????) :rolleyes:

I would imagine that you would have to be very disciplined to do this though....but there again you could always set up a standing order.

MarkyMarkD

It makes naff all difference paying weekly rather than monthly.

If you are paid weekly, though, it clearly makes sense - but more because it is more convenient than because it will save you money.

If your mortgage is £600 a month and you are paying 5%, the interest saving by paying weekly in a 4 week month (February) i.e. 4 x £150) is just 86p.

Most lenders want you to pay by monthly DD, though!

imported_Ducklet

my wages are weekly and i suppose thats still a saving

budgetflyer

(I think) its called an Australian mortgage.Apparently you can knock a couple of years of a 25 yr term.
The Clydesdale bank used to punt this

Spendless

I remember the Yorkshire bank promoting this idea some years ago.

bunking_off

When I worked the figures, I made it that in MarkyMarkD's example it would save a couple of quid a month rather than 80-odd p (assuming interest calculated and accrued daily). Doesn't sound like much, but an overpayment by that much knocks about 3 months off a 25 yr mortgage.

Don't know if anyone lets you do it though, short of moving to a flexible or current account mortgage.