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Keep Mortgage Payments in a Savings Account

I know, this is completely OCD, but it amounts to roughly $15 in savings a month, about $180 a year, to which I apply directly to the principle on my mortgage, which, over the duration of the mortgage will really. Basically what I do is keep the amount of 1 monthly mortgage payment in my ING savings account, then when ING pays me my monthly 2.75% interest (it was 3.5% when I opened it--so hopefully we will get back to that rate!), I add that to my next month mortgage payment and that goes directly to my principle. Small steps, but every little bit helps.

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submitted by TipHero reader: christyp 11/16/2008 2:19 PM

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Yes I just bought myself and planned on doing that as well. I have HSBC (which is basically the same)and hopefully the industry will correct itself and we'll get back to normal. Here in California you have to be very wise with your monies. Remember highest sales tax, property tax and now it looks as though the bonehead governorship here is going to triple the car tax as well.So you idea is a very good one and might I suggest that everyone opening one of these accounts, you'll be surprised at intrest you can gain.
Thanx!

Posted by Iminitforthelonghaul on November 22, 2008 12:54 PM

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Christyp,

I think you should further clarify to say not just 'any' savings accounts, but particularly 'online savings accounts'. That's because the interest rate differential between a regular Bank of America savings account and an online savings account like ING direct or HSBC direct is HUGE. But your idea of using the interest to pre-pay on the mortgage is good.

I have more info on Online savings accounts on my blog.

Posted by Sudeep on November 24, 2008 1:06 PM

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