paying more interest when mortgage payment falls on weekend

miktek

Hi, I'm with HBOS for our mortgage and have noticed that whilst the bank have no issues charging us monthly interest on the last day of each month religiously even on weekends, they will never credit our account with our monthly mortgage payment on weekends.
Sure, they will 'take' the money from our bank account on the 1st, but if is a weekend, they won't credit the mortgage account until the 2nd or 3rd. So we end up paying up to 2 days more interest that month, as the interest period starts bang on the 1st day of each month. Instead of our interest going down and our repayment going up, some months it will go the other way and by up to £20. The interest rate stays solid at 3.99%

Is there any redress available here, or is this just a suck it up situation? Thanks.

Goldiegirl

If it worries you that much, cancel your direct debit and pay the mortgage payment manually


You can then pay on the 1st of the month, weekend or not

miktek

Goldiegirl wrote: »

If it worries you that much, cancel your direct debit and pay the mortgage payment manually


You can then pay on the 1st of the month, weekend or not

I wouldn't say it is worrying us, just wanting to know if this is normal practice. Whilst it isn't the biggest amount of money these days, I'm thinking back to the start of our mortgage, about 10 years ago, when the interest was making up 75-80% of the monthly payments.

amnblog

You've lost me on this one?


You're worried about paying extra interest because a payment falling on Saturday is not credited until Monday?

miktek

amnblog wrote: »

You've lost me on this one?


You're worried about paying extra interest because a payment falling on Saturday is not credited until Monday?

Correct.

eg. (made up figures)

29th November balance is £100,000
30th November interest is added from 1st - 30th November.
30th November new balance = £100,500.
1st December balance is £100,500 and payment of £1000 is taken from current account, but not credited to mortgage account until 3rd December because the 1st was a Saturday.
Next months interest is calculated on 2 days of the balance being £100,500, and 29 days of the balance being £99,500.

So yes, 2 days more interest at the higher balance than there should be. It all adds up.

Goldiegirl

miktek wrote: »

just wanting to know if this is normal practice. .

Yes completely normal. Direct debits are a 5 day working week system, so this situation will happen a few times a year.


If the banks started taking payment early when the 1st is on a weekend, to avoid the situation you describe, most other customers would go berserk - there'd be hell to pay!


It's just one of those things - but there is a solution as I mentioned earlier

amnblog

Two days interest on £1,000 at 4% is 22p


Is that your concern?