Interest Only Mortgage-best day of the month to make direct debit payment

K_S

BikingBud said:

OceanSound said:

Update: Just been on the phone with Halifax mortgages. 

Spoke with a very nice Customer Support Agent. 

I asked him the question. What he said echoed with what is on the Halifax website. If I pay on the 1st of the month, interest will be lower. I then asked him about if the date when we started the mortgage or switched deal mattered (because that may be the date from when the interest amount is calculated). He said it doesn't. My question was based on something I had seen on the Natwest Website. Will post link later.

I then asked him about what the following on their website (https://www.halifax.co.uk/mortgages/existing-customers/change-your-direct-debit.html#account) means and if they have any accounts where the interest is not calculated daily:

 For most accounts we calculate interest daily.

He said for ALL Halifax mortgage accounts interest is calculated daily. He said he's not sure why it says the above in the mortgages section of the website. i.e. For other accounts interest may not be calculated daily but for all mortgage accounts if interest is calculated daily then why not just say that?

Anyway, I then told him that it would've been good to see some kind of of analysis about how much change in the (interest) saving I could see if I change the date from 28th to 1st. 

He then asked for my roll number and after checking the account said that it won't be much difference in the amount of interest saved. 

He explained that as my balance is now around £70,000 and the mortgage payment is around £180 per month, the difference is 42p per month. 

Irrespective of the small sum, I went ahead with changing the date from 28th to 1st. He said there will be two consecutive payments due to the change. i.e. payment at the end of May then the next payment will be on 5 June (monday), then afterwards the payments will be taken on 1st or close to 1st every month. 

I would be interested to see when this cannot happen and if the customer is charged interest to accommodate the "close to".

Bank holidays and weekends can fall on any day, does this inhibit payment?

@bikingbud Hopefully I haven't misunderstood your question but if your monthly mortgage DD is scheduled to go out on the 1st and the 1st is the weekend or a BH, the payment goes out on the next working day. At least that's been the case with all the mortgages I've had.

In the above instance, I would expect the burden of any extra interest charged falls on the borrower.

dimbo61

So what are you doing about clearing the Interest only debt ?
Please don't say we will be using the lump sum from our pensions !
You need that lump sum and regular  pension to live on.
£180 a month is really cheap so overpay every month.
It's a lovely warm felling to say We are mortgage free so don't care about mortgage rates 

housebuyer143

dimbo61 said:

So what are you doing about clearing the Interest only debt ?
Please don't say we will be using the lump sum from our pensions !
You need that lump sum and regular  pension to live on.
£180 a month is really cheap so overpay every month.
It's a lovely warm felling to say We are mortgage free so don't care about mortgage rates 

Most people on interest only who chose it recently probably did so because they don't want to pay off the mortgage. That's certainly why I am on it.