Right, I’m having a mental block and so I thought I’d ask the question here.

Our 2 year fixed BTL interest only mortgage is finishing at the end of the month.
We’ve just had the redemption figure through before completing on the next 5yr fixed interest only BTL mortgage.

For ease of numbers, say the initial interest only BTL mortgage was for £95k
The interest has been paid on time, without issue for the 2 year period.

During the two years, for arguments sake, say we made £5k in overpayments.

Why is the redemption figure for the BTL (when the fixed 2 year period ends at the end of the month) not £90k?

The redemption figure is ~£90150. Why have I lost £150 of my overpayment?

The completion date of the new mortgage is only 2 days after the end of the fixed period (to avoid early repayment penalties) and so I wouldn’t have thought the £150 is for interest for those two days.

Fees?

I don’t think so.

Looking back at the figure there was a discrepancy of about £50 on the 1st annual statement which has now risen to £150 in total after year two.

I still haven’t got the second annual statment, just the redemption figure.

Is there a phone number on there for the mortgage provider?

Will give them a ring after I dig out the policy number etc. tonight. Was just checking I hadn’t overlooked some simple explanation.

It’s probably an account closure fee – it would have been detailed in the fees section of the illustration that you were provided with when you took out the mortgage.

Interest would be calculated daily but you pay a fixed monthly payment – some months 31 some 30 and Feb 28 days but your payment does not go up or down each month with number of days. This can sometimes affect mortgage balance but not by much. Plus when you complete you have initial interest – interest calculated from the day mortgage funds released until end of lenders financial year (usually December but some are January or even February) less the actual INTEREST payments due to year end. This is usually collected on top of first payment after completion BUT some lenders do add to mortgage balance and of course then charge interest. There are also some of the exit fees to consider as all ready mentioned.