April 23 2014 Latest news:

More than half a million mortgage customers do not make their monthly repayments via direct debit, increasing the chances of missing their payment deadlines.

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Research suggests that 570,000 borrowers make their repayments in other ways, such as via cheque or debit card, or even by paying cash. But while those people make up just 5pc of mortgage customers, they have been responsible for two thirds of all missed payments over the past three years.

As well as falling behind on mortgage accounts, missing a payment can damage your credit rating and make it harder to obtain credit in the future.

Setting up a direct debit does not guarantee your payments will made on time – you still need to make sure you have sufficient money in your bank account – but it does mean you won’t miss a payment simply through forgetfulness.

“Direct debits can help households budget more effectively and help ensure that mortgage payments are not missed,” said Joanna Parsley, associate director of financial education charity Credit Action.

“Of course, direct debits cannot ensure that you have enough money but it is striking that those who do fall behind on mortgage payments are more likely to be those who do not pay by direct debit.

“Mortgage payments are likely to be the biggest monthly bills most people face so it can make sense to have them on direct debit and demonstrate good financial discipline, as household budgets continue to be squeezed.”

People who make mortgage payments via other means said wanting to be in control of their finances and being worried about not having sufficient funds were the main reasons for paying by other means, the Moneybasics study found.

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