When signing up to a mortgage repayment plan, there will typically be one main goal for the borrower and another for the lender. The borrower will aim to ensure that they can meet their repayments on time and in full every month, interest included. A bank on the other hand will expect to receive this amount as agreed, so as long as the repayment deadlines are met there should never be an issue.
In the past many people had no other choice than to travel to the bank and make repayments, at the same time every month. Those days are far behind us – and thanks to the advanced digital technologies now available (including online banking), it’s never been easier to repay what’s owed with the press of a few buttons.
But what other types of repayments do lenders usually accept and how easy is online banking as far as repayments are concerned?
Well, as you might have guessed from our image, repayments are all about balance. Some methods might have advantages for certain people, while others may be more preferred. Here’s a closer look at a range of the most popular payment methods that banks accept, as well as how they can be of the most benefit to borrowers.
The most common way to pay a mortgage is with a standing order. Most lenders will set these schemes up once the repayment rate has been agreed upon, but unlike regular standing payment systems, these ones can be prone to subtracting a different amount of cash each month – depending on how the current interest rates have been calculated.
The Traditional Method
Now for those of you that prefer nothing more than taking a trip down to your bank to pay for your mortgage, you’ll be happy to hear that many still accept this method. This option is ideal for those that get paid in cash each month (or week), but it is worth remembering that interest rates will apply, where standing orders can withdraw the extra (or lesser) sum each month – so you will be expected to cover the costs in cash instead.
Some people have a dedicated bank account to cover the costs of their repayments. Whenever the account gets low it will be the responsibility of the borrower to replenish it, as a lender will draw on this sum in much the same way as with the original method (mentioned above). If the right amount of cash isn’t there this could cause you to go into your overdraft, which can result in further fees, so always be careful when using a dedicated account.