First mortgage payment

[disillusionedteacher]

Hi there,

We are completing on our first home tomorrow (yay!). I remember when we signed contracts at solicitors them explaining the first payment but in our excitement we didn't write it down and now can't remember. If we complete tomorrow, 27th, when will our first months mortgage be due? Is it paid in advance, so would pay 1st August for month of August, or are mortgage payments in arrears? I remember him explaining about interest and completing at different times of month would make first payment bigger but can't remember the finer details. Thanks!

You will have documents that outline all that (unless you threw them away). If that is the case then you need to stop throwing away important paperwork and ring up your mortgage company to check the first payment date and amount.

The answer really depends on who you got the mortgage from. When I moved last year I got a letter from the mortgage company shortly after we moved in outlining how much the first payment would be and when it would be taken.

Our first mortgage payment this time was actually smaller than usual as we just had to pay the interest on the loan up to the end of the month and didn't start capital repayments until the next month. Our first mortgage had a larger first payment as we paid both interest and capital right from the off and had to pay a larger amount of interest to make up the difference from the day the mortgage had been drawn down to the day of the first payment.

You will get a post completion letter from your Lender advising of first and subsequent payments
The first payment is normally higher

We completed right at the end of the month, the first payment was higher to cover those few days plus a full calendar month.

The direct debit guarantee will mean you won’t pay until September, you have to have 30 days notice for the payment, interest will be higher on the first payment as that will be charged from completion, you’ll get a letter upon completion giving the amounts and dates

Congratulations!

Our first payment came out about 10 days after we completed, which surprised me, and then they took another one 14 days later so we had an expensive first month in the house

Check your paperwork though

Thank you everyone. I checked the mortgage offer (because I don't throw away important paperwork) and as we didn't know the completion date then the outline it gives is based on an estimated date. It does explain in it how payments work if you, for example, complete in the middle of the month. I just wasn't sure because we are completing so close to the end of the month. However, as you have all said, it did explain that we would get a letter around 10 days after completion detailing payment schedules. Thanks for the information. So excited to get the keys tomorrow now

If it helps, we completed on 29th March. 1st payment was taken on 1st May

Thank you Wanderlust that is a big help! Did they take 2 months payment at once or just one and then the interest accrued?

@disillusionedteacher just the one month and about 2 days of interest I think it was. It wasn't a big unexpected bill. If anything it might have been slightly lower than the agreed monthly payment amount.

We completed our purchase on 17th November 2017 and the first payment wasn't taken until January! It was a standard months payment plus interest from 17th November to that date - so it isn't 2 months payments at once no but it is quite a bit larger than your normal payment due to the additional interest.

It will depend on the payment terms with your bank, how long after completion they take payment. Ours was 30 days after completion I think which would have been mid December, but because our payment date we chose is 5th of the month they waited until 5th January IYSWIM.