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We’ve created this useful guide to help understand how your yearly mortgage payment recalculation works.
You can watch our explainer video to find out more about your yearly mortgage recalculation and what it means.
If you prefer to read about it or want to know more after you’ve watched the video, you can find out the following and more on this page.
Your new monthly payment won’t include any missed payments. If you’ve missed any payments, you’ll need to set up an arrangement to cover your arrears. Please call us on 0808 145 0399 so we can discuss your options. Lines are open Monday to Friday, 8am to 8pm and Saturday, 8am to 5pm. We’re closed on Sundays and bank holidays.
Your monthly payment will go up if you’ve missed previous payments. This is because when payments are missed, your balance will be higher than expected. The monthly payment will increase to cover the additional interest from the higher balance.
When you took out your mortgage, you agreed to repay it by the end of its term or cover your interest payments if you have an interest-only mortgage. You’ll do this by paying us an agreed amount on an agreed date every month.
We’ll sometimes update your monthly payment automatically, such as if the Bank of England (BoE) base rate changes, for example. When this happens, we’ll write to let you know.
We might also need to update your payments once a year if your mortgage balance is higher or lower than expected on that date. This might be because you’ve made a one-off or regular overpayments. You might also have missed or been late with payments, underpaid your mortgage, or even paid it early.
Although your payment is the same every month, the amount of interest charged varies depending on the number of days in the month. So, you’ll be charged 30 days’ interest in September and 31 days’ interest in October.
It might also change by a small amount if your normal payment date falls on a Saturday, Sunday, or a bank holiday and we have to collect it a day or so later than normal.
Yes. Although your interest rate won't change, there can be other reasons why the amount you pay might change.
If any changes impact your existing arrangements, we’ll let you know you in your yearly statement.
If you pay by direct debit, you don’t need to do anything to change your payment
We’ll take the new payment amount on your usual payment date.
If you don’t pay by direct debit and the amount you need to pay changes
You’ll need to pay the new amount in your usual way.
If you have any payment arrangements in place and the amount you need to pay changes
We’ll let you know what this means for your arrangement in your annual statement.
We calculate interest on a daily basis on most of our mortgages. This means if you make a payment, it’ll reduce how much you owe and the amount we charge interest on from the day we actually receive the money.
We don’t always automatically recalculate your monthly payment when an overpayment’s made, but we can update the payment if you ask us to.