Initial mortgage payment higher

looknohands

Why is it that my first mortgage repayment is almost 150% of my regular payment?
I can afford to pay it but the offer doesn't really explain anything about why it's more.

ACG

It depends on the lender, your payment date and the completion date.

I would assume that your first payment includes interest from the date you complete(d) until the 1st of the month (assuming your first payment is the 1st) + your first months payment....If that makes sense?

David_White

If you either call the lender or your broker they will be able to break it down for you.

As ACG has said, there are a few variables at play.

amnblog

As ACG says, the actual figure depends on the lender as they can calculate differently.

This is typically how it is done:

The offer assumes a completion date.

The initial payment will include a standard monthly payment and an amount to cover to the interest charged from the day you draw down the money until the end of that calender month.

That is why the first payment is higher.

You cannot rely on the first payment figure in the offer unless you complete on the date assumed in the offer.

Lenders, rather inconveniently, only inform borrowers of the date and size of the first payment once the mortgage is in force.

To gauge your actual first payment and due date before completion ask your broker or your lender.

GoldenShadow

All depends on the lender.

Our (Natwest) first payment was just the same, even though we completed on 25th Sept and paid from 1st of Nov. I asked if we would have the five days of interest and they said no it will be a normal payment just taken on the 1st so I assume our billing date is effectively the 25th if you like, but funds not taken til 1st.

They all seem to do things differently, some even in advance so probably best to ask them directly.

Thrugelmir

GoldenShadow wrote: »

All depends on the lender.

Our (Natwest) first payment was just the same, even though we completed on 25th Sept and paid from 1st of Nov. I asked if we would have the five days of interest and they said no it will be a normal payment just taken on the 1st so I assume our billing date is effectively the 25th if you like, but funds not taken til 1st.

They all seem to do things differently, some even in advance so probably best to ask them directly.

If you wish to pay on a different date. Pay by standing order rather than direct debit. Though onus will be on you to ensure that the correct amount gets paid. Rather than the lender simply amending the direct debit.

Goldiegirl

The first payment will be more, as you are paying the interest from the date of completion until the first regular payment.

Depending on the date and the lender, you could be paying about six weeks worth payments, before the first regular payment kicks in

Goldiegirl

amnblog wrote: »

Lenders, rather inconveniently, only inform borrowers of the date and size of the first payment once the mortgage is in force.

But you can't really blame them for that, as the first they may know of the completion date is when the funds are requested for completion, a couple of days before the event

kingstreet

Nationwide is best. :mad:

Its KFIs assume 1st of month completion and getting on for double first payment as a result.

mk1971

unless some banks take your payment wrong, if you are a platform jp morgan co-op customer, check my thread

GoldenShadow

Thrugelmir wrote: »

If you wish to pay on a different date. Pay by standing order rather than direct debit. Though onus will be on you to ensure that the correct amount gets paid. Rather than the lender simply amending the direct debit.

They set up our DD wrong it was always meant to be the 1st anyway.

I was just surprised they didn't add on extra interest to go from 25th - 1st.