When Your First Mortgage Payment Is Due

Now that you are a homeowner, one of your key responsibilities is making the mortgage payments. And you do not want to fall behind on your first mortgage payment and ruin your good credit score that got you a mortgage in the first place!

The key dates and numbers you need to have in your mind are:

1. The Completion Date. This is the date where the interest and principal repayments of your mortgage start accruing from.
2. The agreed Direct Debit date with your mortgage lender. This should be in your mortgage paperwork, the date agreed with your lender when the Direct Debit payment will be taken from your Current Account. This date should be monthly.
3. The monthly amount of interest and principal repayment for your mortgage.

Working out your First Mortgage Payment Date

The vast majority of lenders work on a Calendar Month basis, in terms of your mortgage payment. This means if you chose the 10th of each month as your payment date, that payment will be for the interest and principal repayments for that calendar month. Let us call this the Recurring Payment Date. However, some mortgage lenders work in arrears (i.e. they will wait till the month is over before charging for that month) or in advance (they will take it for the next month in advance) but that is rare.

When you Complete, the First Payment Date is usually different from the Recurring Payment Date. This is because there is the problem of a partial month to pay since your Completion Date is very unlikely to be the first of the month.

The First Payment Date after completion is usually in the calendar month after completion. For example, if you completed on the 10th August, your bank will chose a date in September to take payment. Sometimes this is your Recurring Payment date, but sometimes it is not. It depends on your mortgage lender’s policies on the first mortgage payment.

Your first mortgage payment amount after completion will be higher than a usual mortgage payment, as it will include the partial month from your Completion Date, as well as the full month when the payment is taken.

Here is an illustrative example:

• Your monthly mortgage is £1000 a month
• You agree a Recurring Payment date of 20th of each month for the Direct Debit
• You complete on the 10th August (so you have 22 days to pay in August)
• Your mortgage lender will likely take First Payment in September
• Your First Mortgage Payment after completion will be the sum of [22 days in August] + [Whole of September]. So roughly £709 + £1000 = £1709
• Your Recurring Payments Direct Debit will start from the 20th October, and will be roughly £1000 a month

Why Estate Agents ask for proof of funds

Calculating your first mortgage payment

The best way to find out your first mortgage payment is to ask your mortgage lender! They should provide documentation, when the Completion Date has been set, on how much the first mortgage payment amount will be.

In that document, they should also outline what date they will take the first mortgage payment, as well as the Recurring Payment date that will be set up for your ongoing Direct Debit.

First Mortgage Payment Policies by Lender

Want to know the exact policy of your mortgage lender or bank, with regards to your first mortgage payment? We have compiled what we know for some of the largest mortgage lenders in the UK.

Big caveat – these policies are subject to change at any time by the mortgage lender, so make sure you check with them directly for final confirmation.

List of banks we have investigated First Mortgage Payment policies:

1. Halifax Bank
2. Nationwide Bank
3. Natwest Bank
4. Virgin Bank
5. HSBC Bank
6. Barclays Bank
7. Santander Bank

Halifax Bank – First Mortgage Payment (full details)

• They will let you know the amount after your mortgage is complete
• First payment is in the month after completion
• First payment day is normally on the Recurring Payment day, but not if you Complete on your property within the last 4 days of the month, in which case your first payment date will usually be on the 10^th of the next calendar month

Nationwide Bank – First Mortgage Payment (full details)

• Within 5-7 working days after your completion date, you will receive a written confirmation of the date and amount of your first mortgage payment
• Your first mortgage payment can be higher than your ongoing monthly payment
• No other guidance given. Probably conservative to budget for double the usual monthly amount, just to be on the safe side

Natwest Bank – First Mortgage Payment (full details)

• No detailed guidance given, except that they will send you a letter after Completion with when they will take your first mortgage payment and the amount
• Probably conservative to budget for double the usual monthly amount, just to be on the safe side

Virgin Bank – First Mortgage Payment (full details)

• First payment will always be on the 7th of the next calendar month after completion
• No other details given. Presume that payment will include the full calendar month, as well as the partial calendar month of your Completion Day

HSBC Bank – First Mortgage Payment

• HSBC does not publish any guidance online when the first mortgage payment will be taken
• However, we expect them to have a different First Payment Date than the Recurring Payment Direct Debit date
• Call or email your HSBC mortgage advisor that you had been assigned, or ask your mortgage broker
• Keep a look out for a letter via email or in the post after Completion Day
• Conservatively budget for double the regular monthly amount to be taken, sometime in the calendar month after your Completion Day

Barclays Bank – First Mortgage Payment

• Barclays does not publish any guidance online when the first mortgage payment will be taken
• Anecdotal evidence from First Time Buyers we have helped, is that they use the Recurring Payment Date, and take the First Payment in the calendar month after completion
• Therefore, the First Payment amount will be higher than usual, as it is a full month as well as a partial month from your Completion Day
• However, we strongly advise you to contact your Barclays mortgage advisor that you have been assigned, or talk to your mortgage broker
• Keep a look out for a letter via email or in the post after Completion Day
• Conservatively budget for double the regular monthly amount to be taken, sometime in the calendar month after your Completion Day

Santander Bank – First Mortgage Payment

• Santander does not publish any guidance on the first mortgage payment on their website
• Anecdotal evidence from First Time Buyers we have asked is that Santander collects mortgage payments in arrears (i.e. a payment made on the 10th August will be for the mortgage charges in July, not August)
• In addition, it looks like the First Payment date is the same as the Recuring Payment date for the Direct Debit, rather than a one-off special payment
• The amount is probably less than your normal mortgage amount as you are paying in arrears, and therefore you only have a partial month to pay unless your Completion Day was the 1st of the month.
• However, we strongly advise you to contact your Barclays mortgage advisor that you have been assigned, or talk to your mortgage broker
• Keep a look out for a letter via email or in the post after Completion Day
• Conservatively budget for double the regular monthly amount to be taken, sometime in the calendar month after your Completion Day