Weekly mortgage payments UK

oliel

So i keep reading that paying my mortgage weekly would mean that i would save money on mortgage interest as i would be reducing the balance weekly rather than monthly - no intention to overpay at this stage just would want to pay what i would normally pay annually but paid over 52 weeks.   I'm thinking this must save metres surely?  Does anyone know if this is possible with Virgin/Clydesdale?

MorningcoffeeIV

oliel said:

 I'm thinking this must save metres surely?  

I don't think it would surely save any metres. It might not even save you money.

If you decide to break up your monthly payments, you need to make sure you're not paying late or that any of your payments are classed as being in the month before..

It's not worth faffing about to save pennies Just make sure all payments are made on time. 

FtbDreaming

I think most mortgage companies want their standard payment monthly. If you were overpaying then that could be done weekly to save a couple of pence interest. I pay my council tax weekly and the computers can’t handle it. Every April I have a fight with them because they send me a fine saying I’ve not paid the monthly payment in time and it’s because the 4th week isn’t hitting their computer in time. So yeah I wouldn’t mess around trying to change to weekly. 

Edi81

May work in the USA but not in the UK. 

Just make overpayments when you can - that’s the best way to reduce interest paid. 

Sistergold

The whole the reason why those in America choose to pay weekly is so that by the end of the year they would have overpaid as it creates more payments than paying monthly. So in the long run you will save on interest as you reduce your debt a bit quicker. No point you doing it if you don’t want to overpay as it will cost you more in the money you need to come up with by the end of each year. I have not heard of mortgage providers allowing weekly payments here in the uk. 

MWT

Also need to consider that many employers still pay weekly or bi-weekly in the US, so matching the mortgage payment frequency to the income frequency also makes sense...

stephenfindley

Hey all, hoping to get some weight behind this discussion to help shed light on the current system.

Usually with a mortgage, interest is calculated and applied daily whilst payments are only collected monthly. Switching payment frequency to weekly or fortnightly would have a significant impact on the interest levied against a 30yr mortgage and help reduce the term significantly (there are plenty of videos and examples online, mainly from the US around this).

I've been trying to tackle this with my bank (Clydesdale/Virgin) and it appears that most systems are only geared to recognise a monthly payment and apply this to the account.

It would be great to hear from anyone that has had success tackling this with any bank. If they are able to charge daily interest then we should have the capacity to pay it back at any frequency we choose provided we are meeting the required amount each month.

dunstonh

It would be great to hear from anyone that has had success tackling this with any bank. If they are able to charge daily interest then we should have the capacity to pay it back at any frequency we choose provided we are meeting the required amount each month.

If you want to do something like that then just set up an overpayment each month.  i.e. pro-rata 13 payments (for four weekly) into 12.

Many banks operate under a sort-code and account number basis and you can make bank transfers to them.  Others will allow debit car payments online or for you to adjust the next payment due (which can be changed easily each month)

oliel

stephenfindley said:

Hey all, hoping to get some weight behind this discussion to help shed light on the current system.

Usually with a mortgage, interest is calculated and applied daily whilst payments are only collected monthly. Switching payment frequency to weekly or fortnightly would have a significant impact on the interest levied against a 30yr mortgage and help reduce the term significantly (there are plenty of videos and examples online, mainly from the US around this).

I've been trying to tackle this with my bank (Clydesdale/Virgin) and it appears that most systems are only geared to recognise a monthly payment and apply this to the account.

It would be great to hear from anyone that has had success tackling this with any bank. If they are able to charge daily interest then we should have the capacity to pay it back at any frequency we choose provided we are meeting the required amount each month.

I totally agree they can allocate an overpayment but cant allocate a weekly payment.  I think the idea of setting up an overpayment for whatever the extra payment per year is say divided by 52 is a great idea as would also save interest.

Newbie_John

Please correct me if I'm wrong..

But I really see little benefits of weekly payments.
If we pay monthly £1200 for 30 years at 5% Vs 4 times a month £300 for 30 years at 5%, we literally just save on interests:
3 weeks of £300 (£0.93)
2 weeks of £600 (£1.24)
1 week of £900 (£0.93)
Total monthly saved £3.10, £36 a year, £1080 over the duration of mortgage.

And if you would like to do such saving you can simply pay weekly to an easy-access saving account - then set up a direct debit at the end of the month.

Much better results can be achieved with little overpayments.

amnblog

Newbie_John said:

Please correct me if I'm wrong..

But I really see little benefits of weekly payments.
If we pay monthly £1200 for 30 years at 5% Vs 4 times a month £300 for 30 years at 5%, we literally just save on interests:
3 weeks of £300 (£0.93)
2 weeks of £600 (£1.24)
1 week of £900 (£0.93)
Total monthly saved £3.10, £36 a year, £1080 over the duration of mortgage.

And if you would like to do such saving you can simply pay weekly to an easy-access saving account - then set up a direct debit at the end of the month.

Much better results can be achieved with little overpayments.

Hi John, you have clearly not seen the 'click bait' YouTube videos on weekly payment that are driving these queries promising huge savings.

UK Lenders wont have weekly payments, to reduce your total cost simply pass as much as you can as soon as you can within lenders parameters.