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First installment not containing capital repayment for split month
pieroabcd
Posts: 738 Forumite
Hi,
today I had a nasty surprise by my mortgage installment (that I can see only in preview because it's going to be paid tomorrow): the charge is for the whole month of June + 15 days of May.
I completed on the 17th of May, so the 15 days make sense, but the charge for these15 days is calculated as interest only: there's no capital repayment at all. This is like having paid almost £1700 as a mortgage fee instead of 1000 (and not spread over the mortgage).
Isn't this irregular? Shouldn't every installment contain a part of capital repayment?
Nobody ever told me that I would be subject to such a rip off, not even my broker.
today I had a nasty surprise by my mortgage installment (that I can see only in preview because it's going to be paid tomorrow): the charge is for the whole month of June + 15 days of May.
I completed on the 17th of May, so the 15 days make sense, but the charge for these15 days is calculated as interest only: there's no capital repayment at all. This is like having paid almost £1700 as a mortgage fee instead of 1000 (and not spread over the mortgage).
Isn't this irregular? Shouldn't every installment contain a part of capital repayment?
Nobody ever told me that I would be subject to such a rip off, not even my broker.
0
Comments
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No. It's normal. Once the accrued interest for May is out of the way, the payments are calculated to repay the mortgage over the selected term ie 25, 30 years.
Illustrations and your mortgage offer would usually show an assumed start date of 1st of a month and a much higher first payment. Many lenders also attach a leaflet or similar to the offer to explain accrued interest.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.1 -
Entirely normal unfortunately. I don't know how that makes a difference to you though.
If you wanted a capital payment to be taken along with this, that would on top of this interest amount anyways. And if that's what you want then there's nothing stopping you from making an overpayment on the same day as your direct debit, 100% of that will go straight to paying off capital and have the exact same effect as if the lender had taken it from your account.0 -
Yeah, knowing it beforehand.
Anyway, the only solution is repaying early.0 -
Also, I think that your fixed mortgage is till 31st of May (2025 or 2028) not 17th.
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Tracker, not fixed0
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