Mortgage Repayments

Your first mortgage payment is often higher because it covers interest for a period longer than a standard month. It typically includes the interest accrued from the day your mortgage completed up to your first scheduled payment date, plus your regular monthly instalment. After this initial payment, your direct debit should settle to the agreed monthly amount.

With a capital repayment mortgage, your monthly payment is split between paying off the interest and paying off the loan balance (capital). In the early years, the majority of your payment goes towards servicing the interest because the loan balance is at its highest. As the balance decreases over time, less interest is charged, and a larger portion of your payment goes towards reducing the debt.

Yes. If you choose to add arrangement or product fees to your mortgage rather than paying them upfront, the total amount you owe increases. This means your monthly payments will be slightly higher, and you will also pay interest on those fees for the entire life of the mortgage.

Most modern lenders calculate mortgage interest daily. This is beneficial for borrowers because it means that if you make an overpayment, the interest charged on your balance reduces immediately from that day, rather than waiting for an annual adjustment.

Taking a payment holiday doesn't mean the missed payments are written off; they are deferred. The interest that would have been paid is usually added to the total mortgage balance. When payments resume, your monthly repayment amount will likely increase to cover this higher balance and the accrued interest over the remaining term.

If you are on a fixed-rate mortgage, your repayments will remain the same until your deal expires. However, if you are on a variable or tracker rate, your repayments will increase in line with the rate rise. It is important to "stress test" your budget to ensure you could afford your mortgage if rates were to go up significantly.