Making sure you have enough money in your bank account for your mortgage payment can be difficult enough without the worry about when that payment will even be taken.
No, mortgage payments do not come out on weekends or bank holidays, payments are only sent on working days. This means if you have a payment scheduled that lands on a weekend or bank holiday, it will actually leave the next working day.
In this post, I’ll highlight whether your payment date landing on a Saturday or Sunday will cause any issues around late payments, the best day to pay your mortgage and more useful information.
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Does It Matter What Day You Pay Your Mortgage?
No, it doesn’t matter what day you pay your mortgage. Some mortgage lenders will insist that you pay your mortgage on the first day of the month although other lenders are flexible. However, you need to get approval from your lender to change the date or risk getting a penalty.
If you don’t get approval in advance of changing any standing orders, direct debits or automatic payments you run the risk of getting a penalty for a missed mortgage payment. Although understanding what day to move it to can help make your finances easier to manage.
What Is The Best Day To Pay Your Mortgage?
In my view, the best day to pay your mortgage is the day after you get paid. For example, if you are paid on the last working day of the month, then set up your monthly mortgage payment to go out on the 1st of the following month.
This minimises the time the money is sat in your bank account, earning minimal or even zero interest and is put towards paying off your mortgage balance, saving you money.
Also having your income coming in and payments going out in different months can help avoid any worry around aligning payment dates to make sure you have enough money sitting in your bank account to make the payments.
Most mortgage lenders let you change your payment date to any time in the month, although, how do you do it?
How To Change Your Mortgage Payment Date
To change your mortgage payment date you need to contact your mortgage lender directly and ask them to move the payment date. Also, some mortgage lenders allow you to change the date online which is helpful.
For example, Barclays and Nationwide have an online form, Natwest have a facility to change the payment date yourslef within your mortgage online account and with Halifax you have to call up their support phone number. Each of these processes is relatively straight forward, however as you can see there’s not a single approach for all lenders.
If you are wanting to change your mortgage payment date then you need to get confirmation from your mortgage lender before you change it. If you don’t get confirmation first
Mortgage Payment Grace Period – Paying Mortgage Late
Most mortgage lenders offer a grace period of up to 15 days to allow for slight delays in payment that can be caused through no fault of the borrower. However, as a grace period is discretionary each mortgage lender may have different procedures so make sure you check your specific lender.
This means if you’re worried about your mortgage payment date landing on a weekend and your mortgage being one or two days late, you most likely should be ok as this will happen regularly.
Does A Grace Period Include Weekends?
Yes, a grace period includes weekends for mortgage payments. So for example, if you have a payment date of the 1st of the month, the payment will be considered late if it arrives on or after the 16th of the month if you have a 15 day grace period.
Penalties For Paying Mortgage Late
There are a number of penalties that can happen if you do pay your mortgage late that it’s best to be aware of. Remember that it’s in the mortgage lender’s best interest for you to pay your mortgage on time as it avoids having additional admin on chasing for payment or even having to go down the legal route to try and recover their investment.
So if you do think there is a chance you could miss your mortgage payment, contact your lender before this is the case and they may be able to offer some helpful options. If you do miss the payment date, here are some of the penalties that can happen.
- No issue if within the grace period. Most mortgage lenders offer a grace period of up to 15 days from the due date on your mortgage payment before it is classed as a late payment. This is to protect the borrower in case there are any minor delays to payments, such as if payment dates land on weekends or bank holidays.
- Late payment charges. If you pay your mortgage payment after the grace period, your mortgage lender will more than likely charge you a late payment fee. This is usually between 3% to 6% of your monthly mortgage payment.
- Causing a negative impact on your credit score. Missed payments can cause your credit score to decrease as credit bureaus view you as less creditworthy and are a higher risk due to missing a finance payment. The extent to which one missed payment will affect your credit score will depend on a number of factors, mainly how much credit history of successful payments you have. However multiple missed payments can cause your credit score to deteriorate quickly.
- Risk of foreclosure. Foreclosure is a last resort for mortgage lenders as it is a costly process involving seizing back control of the property to sell it for the lender to recover their investment. If you are worried about missing multiple payments, definitely speak to your lender as they may be able to offer you a number of options to avoid any penalties and issues.
I’ve written a full post explaining how late you can realistically pay your mortgage without getting a penalty that you may find useful.
Why Aren’t Payments Made at Weekends or Bank Holidays?
With all of the advancements in technology, it is definitely surprising that banks don’t process payments over the weekends or bank holidays, especially those that are scheduled in advance.
In my view, this is down to the archaic processes that banks still adopt and because there’s no immediate pressure for them to change their processes, they don’t. Changing their processes will mean more work for them in the short term which probably won’t happen any time soon.
However, this is one of the reasons why new challenger banks are being created regularly as the pace of change within the banking sector is incredibly show, opening up new opportunities for new companies.
Summary
Overall, mortgage payments do not come out on weekends or holidays as the banks are closed and do not process new payments until the following working day.
Remember that when you remortgage, even with the same lender, as you’ll be getting a new mortgage the dates can be different so make sure you check to avoid any potential late payments or issues paying.
I hope this post has been helpful and you have now more aware of mortgage payment dates and how to avoid any potential penalities.
Hi, I’m John. I’ve always had a keen interest in Finance, so much so that I’ve made a career out of it! This site is a place where I can share everything I’ve learned as well as give me the excuse to research certain topics.
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