An idea to help over pay mortgages. Basically I’d like my round up pot to be transferred out automatically into my mortgage. Frequency could be configurable, if there is nothing in the round up pot then nothing is paid. Or maybe it could prompt the user weekly and allow one click payment. I also see that cashback is being trialed at the moment. We could have the option to transfer out cashback directly to a mortgage account.
This would be something you’d need your mortgage company to allow.
They aren’t going to want 18p paid daily.
My mortgage allows me to make unlimited over payments without penalty and I’m not aware of any constraints round frequency or size of payment. I’ve paid 5 quid off before now. Anyway if it was configurable as I suggested 5hen the user then min/max/frequency could be set to avoid any problems.
While I don’t think there is anything stopping Monzo from implementing this kind of feature from a technical standpoint, there may be FCA restrictions that prevent them from doing it.
I don’t know, that’s why I said “may be” restrictions.
Most don’t and this would be a minefield for Monzo to get in to!
It’s basically just a standing order with a variable amount. I can already set up a daily standing order for 1 pound to over pay my mortgage if I wanted to.
Don’t see why this might breach regulations or be a nightmare. I’m sure Monzo have people would actually know if there is anything preventing it.
I feel like this isn’t mortgage specific. This is a broader suggestion around scheduling payments from pots based on a percentage of the pot balance at the time.
Yes that’s it. It’s just my use case where I’d choose to send the money to my mortgage. It would save me a lot in interest payments and make it less painful to do.
I can sort of see the appeal of a feature like this, but I’m not sure its worth the development time. In practice, you’re probably rounding up less than £30 a month (one or two transactions per day). You’d be better off just setting up a scheduled overpayment for £30 per month and having your round ups go into an interest bearing pot like the monzo instant access at 4% apr.
That’s great for you. Most mortgages have a cap on overpayments, and exorbitant penalties if a penny is paid over that cap. Some mortgages won’t allow overpayments to be recouped if the holder’s financial situation changes.
For reason such as these, overpaying a mortgage should be a conscious decision, not an automated thing, so the suggestion is a big thumbs down from me, to prevent people inadvertently making very costly mistakes.
I could already make similar mistakes just with normal scheduled payments.
Sure you can. Did you comprehend it’s the automation of the process I object to?
Yes and did you see the part of my suggestion which suggested it could be implemented with one click agreement from the user?
That’s never going to happen!
People won’t read it and will just tick, then get themselves in all sorts of issues.
Ignore the mortgage part and it’s not a bad idea, one that has been requested before with very little traction. It’s unlikely to come, but never say never!
All the naysayers should have a look at sprive.com they can clearly see the benefits/positives. That’s the sort of feature I was hoping could be built into Monzo because I didn’t want a middle man involved. Maybe I’ll have to reconsider signing up for them.
Sprive saves the money in a separate pot until you make the conscious decision to actually make the payment against your mortgage doesn’t it?
It doesn’t automatically make the transaction to your mortgage account?
Yes that’s how I understand it works with a separate pot. I’ve not used it. It sounds like you just authorise the payment each month with one click.