Basics of remortgage

clueless_but_curious

I will be remortgaging later this year and I just want to be crystal clear around my cash flow
I make my mortgage repayment on 1st of each month.  Lets say £2600 in total made up of £2000 principal and £600 interest
My initial rate ends on 31 December 2021 at which point I hope to be remortgaging
Question:
On 1/12/21 I will make a payment of £2600.  Do I then need to make an interest payment of £600 for up to 31/12/21 and then another repayment to the new mortgage provider on 1/1/22?

davidmcn

I don't quite follow your logic here - there'll be a completion date at which point you stop paying interest to lender 1 and start paying lender 2. Though for cashflow purposes there may be an overlap and you end up having to wait for a partial refund from lender 1 after completion (and/or having an initial payment for an odd period to lender 2).

clueless_but_curious

thanks @davidmcn I was referring to the interest that accrues between 1st of month and end of initial term 31st.  So the amount borrowed from the new lender would include the 31 days of interest for December?

Thrugelmir

When you discharge your mortgage you will settle the interest owing until that date. 

As the 1st January is a bank holiday. The earliest the new mortgage will commence is the second or the nearest working day. 

Takes a minimum of 10 days to set up a new direct debit. That's after all the admin is undertaken. Most likely the new direct debit will commence on the 1st February or thereabouts for the new lender. 

dimbo61

Have you checked out the retention deals with your current lender ?
Might easier to stick with the lender you already have.
However if your paying £2,600 Mortgage each month I would shop around about 3 months before your current deal ends.
Consider a mortgage broker as they often have access to more deals from other lenders 

clueless_but_curious

Thanks @Thrugelmir that is crystal clear
@dimbo61 my term is very low and I thought my broker did well securing me 1.8% 2 year fix as a FTB on 90% ltv in December 2019.  I was also borrowing 4.75x my salary
I'll certainly see what Halifax offer me but I have this (perhaps misguided) thought that mortgage brokers have access to better rates than Joe public

getmore4less

how much did you borrow and what term.

I think Halifax still charge more for smaller <£250k on retention deals

can work out the LTV end of year because you won't get 1.8% if you were changing to day at 90% LTV

clueless_but_curious

I already know that calc - I plan to make a further overpayment to bring down to 75% at 31/12