Do you pay your mortgage out of your current account?

[Boobyslims]

That’s about it. I am a first time buyer and buying on my own, a house for myself and my two kids. DELIGHTED.

How do you organise your accounts? Do you pay the mortgage from your current account, or do you have a separate account and pay a standing order to a “holding” account to pay the mortgage from there?

I keep thinking I’ll be worried if my wages go in late… or if my expenses are late on repayment (currently waiting for 1.3k reimbursement in expenses back from work) and the what ifs that might cause insufficient funds for any random reason. If I had it in a second account I could leave some buffer money there in the event of the unexpected.

Thought I’d ask the question here, I’m sure there will be good advice. I’ve just received my loan offer and now asked to fill in a dd mandate for the drawdown etc. feeling very real now! Thank you in advance for advice.

I just pay my mortgage from my current account. Can’t be bothered fiddling around with standing orders.

I have an arranged overdraft facility that would cover my bills if something stupid happened like payroll going down and my pay being late. Never used it, but it’s good to know that I have a safety net if needed.

Another alternative would be keeping a surplus in your current account and pretending it’s not there, but I personally don’t like keeping excess money in my current account.

That’s my problem too, I can’t leave surplus money in a current account as it will leak away and I’ll have nothing to show for it.

work changed its expense process and it’s become a nightmare leaving me out of pockets randomly for periods of time. It’s very unpredictable when it goes wrong.

I was thinking if I used a second account I could leave one months’ payment in there as a cushion.

maybe unnecessary though? I don’t know. If the mortgage bank can’t take a payment due to insufficient funds do they try again that day, or is it quickly classed as a missed payment? I wonder.

I'm a single parent on a tight budget. I have all my direct debits coming out of my current account. I leave enough money in the current account each month to cover this plus I round it up so my dd come to £960 a month so I leave £1000 in which over time gives a buffer (when it gets too much I transfer it to my savings account). I transfer the rest of my money to a second current account for all other day to day spending and some to savings.

I have two accounts, one which all my money goes into and the other which it all goes out of! So, every month I transfer enough ( or slightly more than) to cover all my bills ( all are on direct debits) and transfer this from my “ in account” to my “ out account” . Then any money left in my “ in account” is for day to day spending or saving.

I just use my current account but do have a regular income. I know from experience that at least with my mortgage provider they will try again within a few days. Occasionally embarrassingly I’ve had to call them up to make a payment because I’ve missed that attempt as well... I think as long as you keep a close eye on your bank account and make sure you contact them asap if there are any missed payments to pay them it’s fine. Might be more of an issue if you didn’t notice until many weeks later etc.

Single parent, massive mortgage payment, I transfer money to cover mortgage, strata, rates etc on payday to the offset account for my mortgage, I stay a payment ahead, so if something were to happen I have a spare months payment waiting. It’s an offset account which is also a plus.
I also live month to month, as things are tight now I’m a homeowner as renting was much cheaper.

I have a bills account. I transfer a set amount of money there each pay and then throughout the month, my mortgage, utilities, childcare, insurance etc all come of there.

I have a separate account called “mortgage”. On pay day I move the money over to that account, then the standing order comes out of that account on due date (which is a week after pay day).

Why? Because I work in HR and know that it’s actually not that unusual for wages to be paid late.

This is really helpful, thank you all for replying. I am going to do what a lot of you are doing and get a second type of current account, I may put some of that other DDs through there, or leave the car. Insurance money in there etc. I lien that idea.

much appreciated, thanks again!

Sorry what is an offset account? Not heard of that.

I was taught to keep a buffer in my current account. As my expenses increased as I got older, the size of the buffer grew. Your zero should ideally not really be zero. Have a target floor and just pretend that money doesn’t exist because it’s not available for regular monthly spending. It’s for cash flow or emergencies.

It's a savings account linked to your mortgage. Instead of growing interest in the savings, the interest is used to offset your mortgage interest.

No mortgage anymore but always had it coming from my main current account where on payday that and other direct debit money was ringfenced. A separate amount went into a spending account for day to day costs/ food/ fuel etc.

Work expenses were on a card, paid when funds came in.

It is best to have a couple of accounts, especially if you're a spender. My Natwest account is great because I have multiple savings accounts within the app, plus current accounts. So I can move money around, use savings accounts as different 'pots' of money. When I had a tighter budget I'd put all my spare money after bills in one savings accounts, and just transfer a set amount each week to my main account linked to my card, to reduce spending and have a visual budget.

Now just have wages come into main account, move bill money into bill acount, bills go straight out, then divvy out the rest into savings pots.

Ours just comes out of our current account. I guess being paid late is a risk but in 18 years of working neither DH nor I have ever been paid late, so it feels like a small risk.

I have an agreed overdraft on my account which would cover the mortgage if I needed it to or I have any other financial hiccups - I have never used it though.

The other option is to have to have your mortgage payment coming out a week or so after you get paid so there is less chance of a payroll cock up jeopardising it.

I would also, if possible, try and build up a savings buffer to cover your work expenses so you are out of pocket from savings not day to day living expenses. Easier said than done, I know! I'd also be hassling work to sort out their processes as well!

I have a second account which is my spending account. My wage is paid into my current account and then I transfer an amount out of there for my spending money in the month. Bill account just covers direct debits, all other spend comes from the spending account. You can get accounts that would allow you to set a bills section of that account and then a non-bills section of the spending account. I basically just put my current account away in the house, it is linked to my phone but only for an emergency e.g I’ve needed to lock my spending account.

That’s my problem too, I can’t leave surplus money in a current account as it will leak away and I’ll have nothing to show for it

Run two (or possibly more) accounts. One that you feed once a month with a standing order to pay all your DDs including your mortgage. Do not spend from this account. Set up an arranged overdraft that you never touch but only serves to make sure nothing unexpected bounces.

Another for food, travel/fuel and other essentials. If you're at risk of spending next week's grocery budget on crap this week, then perhaps a third account for non essentials and only allow yourself to spend from this account, on a 'when it's gone, it's gone' basis. Work out how much you can afford to spend on these things and set up a monthly standing order.

You probably also need a savings account to hold money that you will need later in the year for things like Christmas, holidays, insurance, car repairs etc. This is not spending money, it's money for these things only.

Put your work expenses on a credit card, so you don't have to pay them for 3-7 weeks after they've occurred and hopefully you've received them by then. If not, put a rocket under your employer's arse as it's not on for them to rely on employees' good will to run their business.

Yes. Though I have several accounts I use my main one for paying all bills.

I just pay it from my current account but it is scheduled to come out a couple of days after pay day and I have a permanently-agreed overdraft facility that I almost never use but is there in case of the scenario you suggest of pay coming in a day or two late (which has happened occasionally). But I've never let my expenses get up to £1.3k with work - that's not a reasonable position for your employers to put you in! Not many people have a buffer that size. When I had a job that required that kind of expenditure they gave me a company credit card and they paid the bill in full the day it arrived (and I then had to justify every item line by line within 3 days). It's normal to keep a bit of a buffer in a current account, but I can't be doing with keeping a separate account to transfer the mortgage payment into.

We have a bill account for all monthly DDs, we just put money in each pay day and leave it

I’m not a SP, but DH and I have always had a bills account that all bills plus food shopping, kid and family shit comes out of, then our own personal spending account for just that.

I cannot be dealing with DD coming out alongside my ahem discretionary spending.

As an example, total bill are £100, DH and I transfer £150 between us, the difference pays for food etc and a general accumulating savings buffer.

I only check the account to make sure all adds have gone out, otherwise the account just ticks over.

I have all my bills including mortgage set up to come out of a separate account, when I get paid a chunk of money automatically gets transferred by standing order to that account so I’m never in a situation of not knowing whether the money in my main account is ‘spends’ or not.

I have a standing order to savings too, so whatever is in my main account isn’t needed for any kind of bills etc.

Mine comes out of current account a week or so after pay day. But most spending goes on credit card and then paid in full each month, so it's only really bills that come out of my current account so easier to keep track.

I would definitely get a credit card for work expenses if I were you, then just pay them off when work repay you.

I keep £1000 in my current account (once all regular transfers and regular personal bills are accounted for).

I keep a separate joint current account that is always topped up to £2000 at the beginning of each month for bills/mortgage to be taken out of. If I died, it would mean my husband could deal with bills/mortgage from our joint account while my estate was being sorted.

I also move any money spent on my credit card to my savings account at the same bank so that I can transfer it back to my current account the day before the credit card bill is due. This helps me keep track of how much money I have available.

Some money is siphoned off to tandem to be put in savings pots, rest of money goes into my money market ISA.