How is accrued interest and other debits" calculated?

w00519772

I am in the process of switching my mortgage from Bank of Ireland to First Direct. Bank of Ireland has sent me a redemption statement today. It makes sense except for the "accrued interest and other debits", which equates to £210.40. My mortgage is 60,896.99 and my current interest rate (SVR) is 4.74%.

The SVR rate started on 01/04/19 and I made a payment on 18/04/19. £210.40 seems high to me. Here is a calculation I have done:

(210.40*12)/60896.99=4.1%

This is over half a months interest and less than half a month has passed since 18/04/19 (when I made my last payment). How is the "accrued interest and other debits" calculated? I called Bank of Ireland earlier and the person I spoke to didn't know. Am I paying too much?

getmore4less

Depends on lender, my mortgage interest accrual is daily from 1st of month and gets added at the end of the month.

My regular payment is the 16th that reduces the ballance.

The 2 are independent.

w00519772

getmore4less wrote: »

Depends on lender, my mortgage interest accrual is daily from 1st of month and gets added at the end of the month.

My regular payment is the 16th that reduces the ballance.

The 2 are independent.

"interest accrual is daily from 1st of month and gets added at the end of the month". That is exactly what the operator said. Doesn't that mean I am paying too much (considering I have already made a payment).

[Deleted User]

w00519772 wrote: »

Doesn't that mean I am paying too much (considering I have already made a payment).

No, because interest is accrued every day that you have a balance.

Making a payment doesn't stop interest, it just pays off a proportion of it.

w00519772

Deleted_User wrote: »

No, because interest is accrued every day that you have a balance.

Making a payment doesn't stop interest, it just pays off a proportion of it.

I realise that interest is accumulated every day.

Half a month has progressed since my last mortgage payment on 18/04/19. However, I seem to be paying more than half a months interest on the redemption statement.

davidmcn

w00519772 wrote: »

Half a month has progressed since my last mortgage payment on 18/04/19

What period does that payment relate to? (i.e. does it include interest up and to and including the 18th?)

Also, what redemption date does the redemption statement assume?

w00519772

davidmcn wrote: »

What period does that payment relate to? (i.e. does it include interest up and to and including the 18th?)

Also, what redemption date does the redemption statement assume?

Thanks. It says: "transactions up to and including 25/04/19", which is just four days ago.

davidmcn

w00519772 wrote: »

Thanks. It says: "transactions up to and including 25/04/19", which is just four days ago.

I'm not sure that's the answer to my first question.

What date is the redemption statement for? I know you received it today, but usually it would be assuming you're redeeming at a future date. And could "other debits" include a redemption fee?

w00519772

davidmcn wrote: »

I'm not sure that's the answer to my first question.

What date is the redemption statement for? I know you received it today, but usually it would be assuming you're redeeming at a future date. And could "other debits" include a redemption fee?

It is 30/04/19 i.e. tomorrow.

Thrugelmir

What's your mortgage redemption fee? This is likely to be somewhere between £100 and £200. With your last annual mortgage statement you would have received a schedule of current charges.

w00519772

Thrugelmir wrote: »

What's your mortgage redemption fee? This is likely to be somewhere between £100 and £200. With your last annual mortgage statement you would have received a schedule of current charges.

It is £195. I have done the maths and I am still £1500+ better off over five years even with that on top.