Mortgage payment query

Doom

Can a person pay a couple of months mortgage up front, say you got 15k redundancy,
Pay 12 months in one go, spend the next 12 months not worrying about the mortgage...any benefit, will banks be interested?
Thanks.

Waynesireland

You can, you would need to talk to bank, tell them your plan, as long as on variable you can lodge in the funds and they can enforce a 12 month moratorium (no capital or interest).
You are in a good position obviously but I would recommend at least paying interest only for the year otherwise Interest continues to accrue on the full amount and will cost you in the long term.

dobsdave

If you pay 12 months advance in to your mortgage account, the amount will sit there, and each monthly payment will be taken out when due.
You wont gain anything and the bank wont care or possibly even realise its there.

phormium

You could just lodge the 12 months in advance straight to the mortgage if it is variable rate, not usually if fixed. Make sure to cancel the direct debit or standing order though or computer will still attempt to take payments. There should be a benefit as the amount lodged will put the account in credit payments but should reduce the interest charged, check it with your bank, they don't all calculate interest the same way.

dobsdave

phormium wrote: »

You could just lodge the 12 months in advance straight to the mortgage if it is variable rate, not usually if fixed. Make sure to cancel the direct debit or standing order though or computer will still attempt to take payments. There should be a benefit as the amount lodged will put the account in credit payments but should reduce the interest charged, check it with your bank, they don't all calculate interest the same way.

Do you have actual experience of doing that?

phormium

From the other side of the experience, as the banker

Was not uncommon, some people actually like to pay by just lodging lump sums depending on their income stream it works better for some.