Will it cost me £450 to move my mortgage payment date?

Q I've just discovered that I am paying twice for a late direct debit with my mortgage: one £35 fee to Royal Bank of Scotland (RBoS) and one to Birmingham Midshires. Last month I missed my June 2 direct debit of £923. If I miss that it is usually called for on the 15th of the month. This month they called it on June 14, my funds went in on June 15, so I missed on my second call.

Total fees came to £70 at RBoS, £70 to Birmingham Midshires plus £35 for being in arrears, plus another £50 just for fun I think. So a total of £225 for being late paying my mortgage once.

I rang Birmingham Midshires at the end of May to tell them my salary is paid in the middle of the month, and to ask if I could move my payment date. To do that they said I would have to pay £30 for each of the 15 days I moved the payment date (June 2 to June 17).

It will cost £450 on top of my regular mortgage payment to move the payment date to one which suited me. I was never asked by my mortgage company when it was best for me to collect my payments.

ML

A The fact that your mortgage company didn't ask you when it would suit you best to pay your mortgage doesn't surprise me. Along with most other lenders (mine included), they'll have set the date as being the same as the day they advanced you the mortgage in the first place. So if you got your mortgage on the second (as appears to be the case), your monthly mortgage payment was set as the second (or the nearest working day to it as possible).

If it makes you feel any better, they are not actually asking for any extra interest by asking for £450 to move the payment date from June 2 to June 17, they are merely making sure that they are not out of pocket and you don't get 15 or so interest-free days on your mortgage (as you will have worked out, banks aren't charities).

But if you manage to pay them £450 in advance interest to switch your payment date, I definitely would since, as you have already discovered, missing your mortgage payment can be an expensive business. More seriously, making late payments and appearing to fall into arrears does nothing for the state of your credit record.

Finally, having to pay two sets of fees for a bounced direct debit is also perfectly common in the banking community.