Mortgage payment on same day as settlement

mparter

I pay my mortgage payments by DD on the 1st of each month. This month it was the 3rd because the 1st was a Saturday. However, on the 3rd, I also switched mortgage providers (Newcastle BS to HSBC) and my previous mortgage was settled by HSBC.

On the same day, Newcastle not only took the monthly mortgage payment, but they also took about an extra £300 on top. I can’t think why this is. My ERC ran out on the 31st May so I would have paid 3 days at SVR but there’s no way that’s £300+. The redemption figure Newcastle provided HSBC was for the 3rd June so not sure what’s going on. This figure also included any completion fees. I didn’t cancel the DD with Newcastle just in case they did try and take money and it caused issues.

muhandis

The redemption amount at completion should include outstanding interest up to June 3, including any time on SVR. The statement sometimes say that the assumption is that monthly payments will continue to be made in the interim, so that could include the June 1 payment (only to be taken on June 3 because of the weekend).

In your place, I would first talk to Newcastle. If they can't give you a satisfactory answer, either invoke the DD guarantee on your current account for an immediate refund or raise a formal complaint.

It could just be an admin error which they will hopefully refund quickly or an amount due on June 1 (ie pre-completion) which couldn't be taken until 3 June and hence is a valid payment.

mparter

Thanks. Just called them and they said it will be sorted out when they reconcile the account in the next few days. She couldn't tell me one way or another if it was a mistake or not.

I don't mind paying the normal monthly payment but not sure what the extra is about.

mparter

Received a letter today telling me they were refunding me the (just over) £1,000 they took out of my account. No explanation how they arrived at that number. Just as well it didn't leave me short!

LRmortgage

When you complete on a remortgage, your existing lender has no idea that you are paying it off, until they receive the funds from your Solicitor.

Therefore, it is business as usual, I.e. they collect the normal monthly payments until they know any different.

In your case, they have acted correctly, and processed a refund as soon as they were aware that you had paid your mortgage off with them and that you didn’t owe that payment.