What is this Interest on my Redemption Statement and why do figures not add up?

chriskaf

Will be very grateful if someone could explain the following please?

2 quesions really.

January 2011 received my Annual Mortgage statement which stated I now owed approx £228,391 which is fine. It showed that in December 2010 I cleared £270 as capital repayment, with £269 in November, £268 in October etc. So based on that I would assume that minimum capital repayment per month from January 2011 - December 2011 should be 12 x £270 = £3240 leaving me approx £225,151 on 31st December 2011.

I am changing mortgages on 3rd January 2012 and changing Bank so solicitors asked for a redemption statement which has come back as £228,123. Now I have an early repayment charge of £1784 which I accept (as one of old loans for mortgage ends in June 2012) but in my mind this should mean that total is £225,151 + £1784 = £226,935 (lower than the figure they have given on redemption statement).

In the Redemption statement there is an amount of £1066 showing under Interest which nearly explains how they got to £228,123 but what is this interest? My mortgage goes out on the 1st of each month. December has been paid and redemption statement was dated 28th December. I can possibly understand paying interest for period 1st Jan - 3rd Jan when the mortgage is redeemed but can't for the life of me understand the £1066 Interest.

Has spoilt my New Year as tried to call the solicitors, my old bank and new bank but they are all closed until the 3rd.

Any ideas before my blood pressure hits an all time high?

:-(

Many thanks in advance

Thrugelmir

Mortgage interest is charged monthly in arrears. In effect your payment on the 1st January 2012 would clear the interest due for the period 1st to 31st December.

You solicitor has asked for a redemption statement dated 3rd January 2012. So this will include interest for the period 1st December through to the 3rd January. No account will have been taken of the payment you are due to make on the 1st January.

As the January payment will leave your account on the 3rd January. This will not be processed in time for your mortgage redemption. So will be refunded back to you in due course.

Open a bottle of something, pour yourself a drink and relax. :beer:

chriskaf

Cheers Thrugelmir. That makes sense and based on the daily interest charge i can understand where the £1066 comes from. I was unaware Mortgage Interest was charged monthly in arrears. That has put my mind at rest. I'll open my bottle of Red now ready for this evening. Have a good evening.

Cheers