Interest Charged on First Mortgage Payment

PrincessLou

Just wanted to clarify my understanding regarding the interest charged on the first mortgage payment.

Scenario:

• Completing on 1st September
• Mortgage payment day 15th of the month, therefore first payment due on 15th October.
• First payment will be normal principal repayment, normal one month interest plus the interest on the outstanding mortgage balance for the 1st to the 15th September.

Is this correct?

Therefore, am I financially better off (in the context of the entire mortgage period) setting the date of the first payment to as early as possible to avoid the additional interest charged?

Simon_gloster

Spot on. Assuming your on repayment and daily interest having a credit to the account as early in the month as possible means the interest charges on the bearing balance for the previous will be less the earlier you pay.

You may still have time to do this........call and check.

Wh05apk

No, Your payment for October will be a normal monthly payment, which will cover both interest and capital + interest for the whole of september, so not far off a double payment.

opinions4u

Surely it depends on who the lender is.

Who is the lender?

PrincessLou

The lender is HSBC if that helps.

Simon_gloster

Initial interest is usually charges 14 post completion should the agreed payment date be between the 1st and the 9th.

Mentioned already it will depend on who you used, and it is likely your first payment will be significantly higher. Then again you would have had the money for free for a while.