balance on mortgage doesn't make sense...

wy2k

Hi
I'm a first time buyer with my first mortgage.
I've been looking at my mortgage statement online short as it is as I've only made my first payment at time of writing this.
Anyway taken off my statement
my mortgage advance is 67580
Interest charge 278.44
Fees and charges 20
Payment received 373.12 - made up of around 124 of interest plus first payment.
Outstanding balance is 67505.32.

My mortgage company did pay me 500 to go towards solicitors fee.
But I don't understand why my balance is not around 67207. It looks like I've only paid 75 off. Surely this is a typo? Otherwise I'm confused. Can you possibly help me understand thank you

Thrugelmir

wy2k wrote: »

Hi
I'm a first time buyer with my first mortgage.
I've been looking at my mortgage statement online short as it is as I've only made my first payment at time of writing this.
Anyway taken off my statement
my mortgage advance is 67580
Interest charge 278.44
Fees and charges 20
Payment received 373.12 - made up of around 124 of interest plus first payment.
Outstanding balance is 67505.32.

My mortgage company did pay me 500 to go towards solicitors fee.
But I don't understand why my balance is not around 67207. It looks like I've only paid 75 off. Surely this is a typo? Otherwise I'm confused. Can you possibly help me understand thank you

The initial £124 did not cover all the interest charged from the date that your mortgage was advanced.

Farmerbob

wy2k wrote: »

Hi
I'm a first time buyer with my first mortgage.
I've been looking at my mortgage statement online short as it is as I've only made my first payment at time of writing this.
Anyway taken off my statement
my mortgage advance is 67580
Interest charge 278.44
Fees and charges 20
Payment received 373.12 - made up of around 124 of interest plus first payment.
Outstanding balance is 67505.32.

My mortgage company did pay me 500 to go towards solicitors fee.
But I don't understand why my balance is not around 67207. It looks like I've only paid 75 off. Surely this is a typo? Otherwise I'm confused. Can you possibly help me understand thank you

Ive looked at it as Loan £67580 + £20 (assume chaps fee) + £278.44 (interest due) = £67878.44
Minus your payment of £373.12 = £67505

Your payment covers accumulated interest from date of completion until first payment due and only a portion of the capital. Itll look better next month when itll only be one month of interest

wy2k

Thanks, I have just been looking at the letter that told me about my first and in short, it says regarding my first payment that it is made of 124 of interest for the month of competition and the balance being the actual normal monthly payment. That the amount would be collected on or around 2nd January which it was according to my bank statement. However, my mortgage statement says the payment was retrieved on the 18th..16 days later. So does that meant I incurred 154 more interest in 16 days? 278-124? Seems a little high if so?
thanks again.

Thrugelmir

What's your interest rate?

wy2k

my interest rate is 2.69 for the first 5 years of mortgage

Thrugelmir

Would appear that your interest charge is made up of £124 up to the end of the December plus £154 for the whole of January 2018.

Daily interest being £4.98p.

31 days @ £4.98p = £154.40p.

wy2k

thanks. So all the maths makes sense to me now.. I think. So 124 covers from 7 December till 31st 154 covers from 1st Jan till 31st. But if I made my first payment on 2nd Jan and they showed the payment retrieved on the 18th why do they charge interest for the whole month and not from 1st till 18th?
Oh is it cos my 2nd payment 1st Feb is around 248 (and every month after)?

TrickyDicky101

Interest is charged on your entire outstanding balance for the whole of the month - while your outstanding balance far exceeds the size of your monthly payment (which it does at the start) then the timing of your montly repayment does not have a significant impact on overall interest due.