First mortgage payment to NatWest

nik_k

We're in the latter stages of purchasing our new house. I'm looking to pull together some of the finer details of our budget for the next couple of months, but am getting a bit confused about our first mortgage payment. Our lender is NatWest - I gather that different lenders have different ways of dealing with first payments.

Now, I know that this is no cause for concern, and that we'll get a letter from NatWest after completion setting all this out in black & white, but I'm gonna ask the question anyway, and, who knows, it might help someone else out in the future too...

We're due to complete on 7 Feb, and, as far as I can remember, we have opted for our mortgage payments to be taken on the 26th of each month. Therefore, I've been under the impression that we'd pay around 7 weeks of mortgage on 26 Feb (i.e. 7 Feb to 25 Feb in arrears and 26 Feb to 25 Mar in advance). However, after talking to colleagues in work, I'm doubting this assumption.

Someone mentioned that our first payment would likely not be taken until Mar, so I took that as meaning that we'd pay around 11 weeks of mortgage on 26 Mar (i.e. 7 Feb to 25 Mar in arrears and 26 Mar to 25 Apr in advance).

However, someone else reckons that although the payment would not likely be taken until Mar, it would then only be for our normal monthly amount.

Is anyone able to advise with any certainty? As stated above, I know this isn't a cause for any real concern, it's more for my sanity, and also might help others out in the future.

GMNN

Just went through remortgage completion with Natwest today, so will let you know once 1st payment comes out... But, my understanding is that the 1st payment will just be the normal monthly payment (as shown in your mortgage illustration) plus interest for the days from completion until the date of the 1st payment.
So in your case, I would expect the 1st payment to come out on 26th Feb, which would be regular monthly payment + interest for 7th Feb to 25th Feb - I'm not sure what you mean by "7 weeks of mortgage" (the monthly payment will not be pro-rated over 7 weeks). Then 26th March onwards will be your regular monthly payment shown on mortgage illustration.

nik_k

GMNN wrote: »

Just went through remortgage completion with Natwest today, so will let you know once 1st payment comes out... But, my understanding is that the 1st payment will just be the normal monthly payment (as shown in your mortgage illustration) plus interest for the days from completion until the date of the 1st payment.
So in your case, I would expect the 1st payment to come out on 26th Feb, which would be regular monthly payment + interest for 7th Feb to 25th Feb - I'm not sure what you mean by "7 weeks of mortgage" (the monthly payment will not be pro-rated over 7 weeks). Then 26th March onwards will be your regular monthly payment shown on mortgage illustration.

By 7 weeks I meant the 3 weeks (give or take) between completion and the first payment date, in arrears, plus 4 weeks as the first month, in advance. Sorry, tried to explain that in the initial post, but obviously failed!

GMNN

Sure, but the ~3 weeks between completion and 1st payment are not in arrears... You need to dissociate the 2 periods, even though both will be covered by the 1st payment:
- before your 1st payment, you're only paying interest on the loan
- only once you've made your 1st payment you start paying down the capital

So my point was that your first mortgage payment will not be a 7-week pro-rated monthly payment (e.g. 49/30 x monthly payment) - it will be much less than that (regular monthly payment + 3 weeks of interest)

nik_k

GMNN wrote: »

Sure, but the ~3 weeks between completion and 1st payment are not in arrears... You need to dissociate the 2 periods, even though both will be covered by the 1st payment:
- before your 1st payment, you're only paying interest on the loan
- only once you've made your 1st payment you start paying down the capital

So my point was that your first mortgage payment will not be a 7-week pro-rated monthly payment (e.g. 49/30 x monthly payment) - it will be much less than that (regular monthly payment + 3 weeks of interest)

Thanks again, this does make sense...

However, a bit more forum searching, and posts 8 and 15 of this thread - https://forums.moneysavingexpert.com/discussion/5714492/first-mortgage-payment - seem to suggest otherwise, at least as far as a clearing bank (which NatWest is) is concerned. That would appear to suggest that a first payment date of 26 Mar, for the normal payment amount, could well be feasible! The plot thickens!

meltonuk

Good morning,

We completed with Natwest on the 18 of September, our first payment came out on the 25th of October and was just our normal payment as advertised on the illustration forms.

Hope this helps a little

nik_k

meltonuk wrote: »

Good morning,

We completed with Natwest on the 18 of September, our first payment came out on the 25th of October and was just our normal payment as advertised on the illustration forms.

Hope this helps a little

Thanks - this does therefore confirm that a first payment date the month after completion, and for the normal monthly amount, seems to be NatWest's approach

nik_k

UPDATE
Just as a quick update to this thread - we received our letter from NatWest, and the first payment will be taken on 26 Feb (i.e. same month as completion).  It's for our bog standard usual monthly amount.
Moral of the story is just to wait for the letter and not be as impatient as I was being, and also don't believe everything you read on the internet