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Annual interest calculation
Buddie
Posts: 4 Newbie
Looking to take out a short term Woolwich interest only mortgage - nominally 5 years, but hope to repay after a few months once a bond matures.
Woolwich say interest is calculated annually & that while lump sum repayments can be made as you go along, they do not recalculate the payments until 30 September.
Don't understand this. If a lump sum is repaid on 1 October, does this mean you continue to pay each month on the original loan amount until next 30 Sep?
And what happens if the loan is repaid in full before then? Do they recalculate the interest charge & give you a credit for interest overpaid?
Woolwich say interest is calculated annually & that while lump sum repayments can be made as you go along, they do not recalculate the payments until 30 September.
Don't understand this. If a lump sum is repaid on 1 October, does this mean you continue to pay each month on the original loan amount until next 30 Sep?
And what happens if the loan is repaid in full before then? Do they recalculate the interest charge & give you a credit for interest overpaid?
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