Dovetailing end of fixed rate & remortgage

stevie_wonder

Hi,

Sorry if this daft, but I've had a mortgage for 7 years, but never done a remortgage (mostly due to selling and then not immediately re-buying).

I have a fixed rate product with A&L 4.89% which ends on 31st August. I have everything in place for a new mortgage with One Account and the solicitors say they will sort it all out on the 1st September.

I had a letter from A&L today saying that from 1st September my new rate is 7.19% and £874.09 per month, which is fine, however I don't expect to be paying that as I will have my new One account mortgage in place. Problem is, my mortgage payment comes out on 1st of the month, and (not sure if this next bit is a problem or not) also A&L charge me monthly interest.

Couple of questions then:

Firstly, will A&L still take my DD for the mortgage on the 1st, even if the remortgage is going through? What should I do to ensure this doesn't happen?

Secondly, will I still get charged a months interest when the remortgage happens on the 1st?

Thanks, in advance,

lisyloo

Firstly, will A&L still take my DD for the mortgage on the 1st, even if the remortgage is going through?

Yes.
They will only stop payments when it's definitely cleared.

What should I do to ensure this doesn't happen?

Nothing.
You should make arrangements for paying 2 payments temporaritily
e.g. moving money from a savings acccount so you don't go overdrawn.
The problem is that if you cancel your DD you could potentially get a missed payment on your credit report for 6 years.

Secondly, will I still get charged a months interest when the remortgage happens on the 1st?

No, you will get charged for 1 day (1st September).
Any remaining money will be sent back to you, but temporarily you need enough in hand for 2 payments until it's refunded.

It's a bit of a pain yes, but it's better to take a bit of savings out temporarily than risk getting a bad credit report.

stevie_wonder

Liseyloo - you seem to answer all my problems - are you available for financial advice?

Thanks for answering the questions anyway puts my mind to rest.
Actually, I will have enough available as my salary is paid in on last day of August - and the one account won't actually transfer any of my DD's or ask me to change salary until the day the mortgage is completed.

lisyloo

Liseyloo - you seem to answer all my problems - are you available for financial advice?

Sorry - I don't have any qualifications, but I'll try to help where I can.