Interest is added to your mortgage account from the day of completion until the last day of that month. After that, interest is charged monthly on the balance outstanding at the end of the previous month. This means your first month’s repayment is likely to include the interest accrued from completion to the end of the month.

Monthly payments

Payments to your mortgage account will be collected monthly by direct debit from your bank account. A direct debit instruction will be included with our mortgage application form. Soon after the start of your loan and before any payments are actually due, we will write to you to confirm the due date and amount of your payments.

Your mortgage must be paid by direct debit. You can choose any payment date between the 10th and 28th day of the month.

Rate changes

If there is a change in mortgage interest rates we will write to you before the first revised payment is due to let you know the new amount and when it will be collected.

Different ways to repay your mortgage

You can choose whether to pay your mortgage through the capital and interest repayment method, the interest only method (backed by an investment or other means of repayment) or a combination of both. 

Capital and interest (also known as repayment mortgage)

You make one monthly payment, part of which covers the interest due for the month and the remainder goes towards paying off the original amount you borrowed (the capital). As long as you make all your payments as due, by the end of the mortgage term the mortgage will have been totally repaid.

Interest only mortgage (by prior agreement)

Your monthly payment to us only covers your mortgage interest - not any of the original loan. The loan is repaid at the end of its term from the proceeds of an investment which has been taken out separately to act as a 'repayment vehicle' or you will need to have some other means of repaying the mortgage. Examples of investments that can be used as vehicles to repay a mortgage are endowment policies, pension policies, cash ISAs or stocks & shares ISAs.

It is important to remember that the value of any investment is subject to market performance, so can go down as well as up. This means there is no guarantee that the investment fund will be sufficient to repay the loan in full. It is your responsibility to ensure that adequate funds are available at the end of the mortgage term to repay the original loan. Failure to make suitable arrangements to repay your mortgage at the end of the term may result in you being unable to repay your mortgage and so being in default and/or the mortgage continuing for longer than originally anticipated. In either case this may adversely affect your future financial plans.

Overpayments, lump sum payments and early repayment charges

It may be possible to make lump sum payments or overpayments to your mortgage, depending on the mortgage product you have chosen. However, some products carry an early repayment charge, so you should check the terms of your Mortgage Offer very carefully before making any lump sum payments as an overpayment may incur an early repayment charge.

If you are thinking of making an additional payment to your mortgage, contact us first to find out how an overpayment or lump sum payment would affect your account. Details of early repayment charges are specified in the Residential Mortgage Rate Guides.

Payment difficulties

If your circumstances change and you have, or think you will have, difficulties with your monthly payment, let us know immediately. We will try to help and will work with you to find a solution and prevent unnecessary arrears.

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