Keep your mortgage and current account in separate banks

This was suggested in a reply to the thread on What all consumers must know

A few people have asked why.

The main reason I can think of is that if you get into financial difficulty and you have a few direct debits, the bank will probably honour its own direct debit first and bounce the more expensive ones like credit cards.

If you are in difficulty, you can save a bit of money in your bank account if it's in another bank and you will be in a better negotiating position with your mortgage provider.

The main reason I would have thought is that you would still have control of the cash and could decide what to do with it. Otherwise the bank would take it to pay off the mortgage and any other debts you have with them. This way you can decide to pay off who your prefer first or just to spend it.

One reason I have seen mentioned here is in relation to a bank going bankrupt. It seems like the way deposit protections work is if you have a mortgage and savings with the same bank, and that bank goes bankrupt, the mortgage will be sold on less the amount of savings you have. You would not lose money, but if the savings are your rainy day fund it may be difficult to get that sum released from the mortgage, especially if the mortgage is in negative equity.

From bitter experience never have your personal account in the same bank as your business account.
Never let your buiness account bank know what you have in your personal account.
The same reasons apply for keeping your mortgage and personal accounts in seperate banks.

never keep all your eggs in one basket comes to mind !