Bank not allowing change of date of mtg DD

[rameire]

If you extend out your payment date. From say the 10th to the 20th. You will be changing your due payment date. Your interest that posts to the mortgage will still post on the same day as previously. So technically your balance is higher until you make your payment. This higher balance is now the balance that is being used to calculate the interest. So Interest will be higher. As their systems now calculate daily. Once your payment is made the new balance is used to calculate the interest till the next month when it occurs again. Repeat and rinse to the end.

 

[Andrew365]

Do not underestimate the complexity of I.T. systems used in banks. Most of the time it is a hodgepodge of new and (very) old systems that have been cobbled together and making any kind of change is a tiresome and expensive proceedure.

I hear that!

 

[kitty81]

Hi we recently took an UB switcher mortgage and I was given an online mortgage account to manage it.....see balance, interest rate etc & within that online system there is an option to change the DD date. I just filled out the details and changes the date by about 10 days and there was no change or implications to the amount we pay? No phone call or anything required!

 

[kitty81]

Manage my Mortgage | Log in

Here's the page

 

[Nutso]

Don't mean to be going off the point but... Is my understanding correct that the same principle applies if you go to paying your mortgage from Monthly to Weekly so you end up reducing the term of your mortgage because you're paying more frequently? I hope so because I changed recently thinking that was the case.

Yes this is correct. I am not sure how much the overall impact is but I have been doing this for years. For e.g. monthly payment due on the 30th of the month, I pay weekly on 7th, 14th, 21st 28th and every 7 days thereafter. Your mortgage will be reducing on each of these dates, therefore accruing a lower rate of interest than if you waited till the 30th.
You will have a bigger impact if you are paying 25% of your mortgage payment weekly, as you will effectively pay the equivalent of 13 monthly payments thus reducing your mortgage more quickly. I pay the annual amount divided by 52 but have also built up a "reserve" of 3 months payments on my mortgage account as I feel more comfortable with a bit of a cushion.