What is the best day for mortgage completion to save the most money?

[Lolita55]

I heard that there’s a difference on how much you save on the mortgage depending on when in the month you move into the home you bought. Can someone explain this to me and what day would be best to move in? (E.g start of month or end of month etc)

Thanks :)

I think it is the start of the month but even if end of the month you can change it, at least I was told I could. My payment goes out at the end of the month and I was told I could make it the first of the month. It saves the extra interest over that month, and every month. I haven't got round to it though. But I do overpay so not the end of the world.

Never heard that. Your first month mortgage payment will be higher the later you move after the day if the month you agree to pay but you don’t save money.

Ah my interest is calculated daily so makes no difference.

@annielouise bit surely the amount of days in-between are the same so the interest would be the same??

I think it is something to do with interest being calculated daily. I'd have to check the details but what the OP mentions does ring a bell with me.

It only matters if your interest is calculated monthly. Then you complete closest to the interest day at end of that interest month so as to not encroach into another month's interest. If your interest is calculated daily it doesn't matter.

I would have thought that interest is always calculated daily these days, but check your mortgage offer OP.

But what you might be referring to is that sometimes in the first month, you might have to make two payments, at what is an expensive time, so feels like you're paying double, but it would work out that you pay the same overall/less at the end to make up for it, which isn't much of a comfort if your finances are stretched at the beginning.

I don't know if 'double payments in the first month' are still a thing, I know they were when we've previously taken mortgages out, but seeing as we have lived in the same house with the same mortgage for well over 10 years, as we took out a really good lifetime deal, I haven't actually dealt with 'mortgage stuff' since then so obviously lots might have changed with internet/computers/more automated banking etc.

The first mortgage payment tends to be a bit higher as it will include daily interest for the extra days from completion date to the first payment. The closer to the payment date you complete the less additional interest you’ll pay (I can’t quite get it straight in my head but I think as a PP said you don’t actually pay any extra over the term of the mortgage). It’s a bit rubbish in theory although whenever I’ve completed a purchase or moved to a new mortgage deal I’ve actually ended up ‘skipping’ a payment between the last payment to the old mortgage company / landlord and the new one being set up. E.g. my last completion was the 28th which is also my payment date, but the first payment didn’t come out until the 28th of the following month. That’s a nice little bonus and offsets the bigger first payment.