Remortgaging - Interest calc?

the4horsemen

Afternoon,

I wonder if anyone can help me with the following query. I'm looking to remortgage my property with a new lender at the start of next month as my current lender has become very uncompetitive.

My product ends on 1st April where I'll be free of early repayment charges. My monthly payment is normally taken on the 3rd of each month.

As it looks like I'll be completing days or maybe weeks after this does anyone know how the interest/capital is calculated and added to the new mortgage. Will I have to pay interest for the whole of April with my existing lender and new lender and is capital repayment then deducted from the balance of the mortgage when transferred to the new lender?

Is the interest and capital taken in full and then the difference refunded if I remortgage before the end of the month depending on how many days left etc?

dimbo61

I guess you will go onto the current lenders SVR but please check yourself.
A quick phone call to the lenders mortgage centre should give you a current balance and what the new mortgage payment will be in April.

the4horsemen

I will go to current lenders SVR but just wondered how the interest is calculated. They will take a full payment say on the 3rd of April but should I complete the remortgage on the 4th will I forfeit the interest for that month or have the majority refunded. Will the capital repayment for April's payment then be deducted from the balance for the remortgage, forfeited or refunded?

getmore4less

Depends on the how your lender does interest and calculates the redemption amount.

on a daily interest, compunded monthly you will only pay the interest on the new loan from the date it is drawn down and on the old loan upto when it is paid.

depending on the exact dates there may be overlap so you pay interest on both amounts for a day ot two.

The first new payment timing may include more than a months interest so be bigger.

If the old mortgage redemption figure may not include the last payment so there will be a refund.

it is a good idea to make sure you have approx twice the normal payments available to cover cash flow