Why is my first payment so high?

evosy1978

Hello all.

I've got my details of my 5 year fix. The first payment is £700 and the following 59 payments are £458. Why is the first payment so much and also do the payments start from the day of exchange of contracts?

Thanks

Yorkie1

The first payment includes interest from the date your solicitor draws the funds down from the lender (usually just a couple of days before completion), and the payment for the month in which it is made.

So, for example, if you complete on say the 10th of the month, and your first payment is made the following month, it includes from say 8th of that month plus the full payment for the following month.