There’s a good reason I pay my mortgage manually each year.
- My credit card and utility bills have all been set up to autopay.
- But I pay my mortgage manually each month.
- I prefer to pay my mortgage manually so I can make extra payments as needed, as well as for other reasons.
I have automated many aspects of my financial life over time. Most of my bills, including my credit cards and utility payments, are paid automatically out of my bank account before the due date. And I transfer money to saving accounts automatically on payday to make sure I’m meeting my investment goals.
But there’s one payment I have resisted automating and instead pay manually each month. It’s my monthly mortgage payment.
This is a payment I’ll have for a long time, and despite the fact it would be more convenient to have it paid out of my checking account without my intervention, I never plan on setting up automatic payments for it.
Why I’ve chosen to pay my mortgage manually every month
There are a few big reasons why I’ve opted to manually pay my mortgage payment and why I’d never automate it.
First and foremost, my mortgage is the only debt I don’t pay in full every month. My credit card’s automatic payment is set to ensure it brings my balance down to $0. And I obviously pay my entire utility bill and cellphone bill every month.
Since my mortgage is the only debt I carry a balance on, it’s the only one I pay interest on. As a result, I want to manually pay my loan each month so I can see exactly how much interest I’m paying — and what percentage of my payment goes toward reducing principal versus covering finance charges.
Paying attention to the interest costs I face each month helps me see exactly what my home is costing me over time. It enables me to track my progress with mortgage payoff, since each month my interest cost gets reduced and the payment toward principal gets a little higher as my balance goes down. And, since I itemize my taxes and claim a deduction for mortgage interest, keeping track of total interest paid helps give me more insight into what my tax savings will look like.