Need help calculating daily mortgage interest (2024)

silvercar Posts: 47,463 Ambassador

25 July at 6:28PM

I can see it both ways. If you had moved the mortgage when you should have done, you would have been paying interest for those days to Virgin, is their argument.

Your argument would be that your new mortgage will end 8 days later, a time when you would not have any mortgage to pay. But their counter argument will be that you are unlikely to keep the Virgin mortgage for say 20 years, a point born out by the fact that you are moving providers now.

penners324 Posts: 2,940 Forumite

25 July at 7:08PM

Their calculation appears correct.

Compensation is based upon putting you back in the position you would have been without the error.

Phoenix72 Posts: 308 Forumite

25 July at 7:28PM

BarelySentientAI Posts: 1,584 Forumite

25 July at 7:38PM

jgreen1986 said:

I complained to the solicitors, who eventually admitted they'd messed up, and they agreed to refund the extra interest we paid during this period. However, I'm not sure exactly how to calculate this sum. The redemption figure for 3rd June (end of the Barclays deal) was £205,813.94. The 8 days of SVR was then added at £49.09 a day which comes to £392.72. This is what I'd like reimbursed.

That's not the extra interest for the 8 days. That's the total interest for the 8 days.

jgreen1986 said:

The solicitors however have said they will only reimburse £27 per day as they've subtracted the £22.09 of daily interest (3.84%) I'd have been paying to Virgin Money during these 8 days.

That's theextra interest for the 8 days. On the face of it, then, they are correct.

Whether you have the argument that silvercar explains about extra interest over the entire life of the mortgage, I'm not sure.

25 July at 7:55PM

I am not fan of Optima' but I think what they are proposing is correct. Thats how I would calculate it.
Your free to dispute it and they will have a complaints process but I think you would just be wasting your time.

What you want basically means they are paying all of your interest for 8 days rather than the extra interest you have been charged.

I am a Mortgage Adviser

You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.

25 July at 11:58PM

silvercar Posts: 47,463 Ambassador

26 July at 7:35AM edited 26 July at 7:46AM

ACG said:

I am not fan of Optima' but I think what they are proposing is correct. Thats how I would calculate it.
Your free to dispute it and they will have a complaints process but I think you would just be wasting your time.

What you want basically means they are paying all of your interest for 8 days rather than the extra interest you have been charged.

OPs argument would be that the mortgage is finishing 8 days later than it would have done had the changeover happened on the correct day. So OP is focusing on the end 8 days of the mortgage, whereas the lender and most people here are focussing on the first 8 days.

eg assuming a 20 year mortgage that should have started on 1 July 2024 but was actually delayed to 9 July 2024. It will now end on 9 July 2044. So OP will be paying Virgin Money for exactly 20 years, so that bit is unchanged. But, due to solicitor admitted error, OP also had to pay Barclays from 1 to 8 July on the higher Barclays rate.

BikingBud Posts: 1,922 Forumite

26 July at 9:09AM

So the interest rate needs to be reset and the capital that would have been paid off during the period also needs to included in order to overpay and bring the date back to 1 Jul 2044?

silvercar Posts: 47,463 Ambassador

26 July at 10:13AM edited 26 July at 10:20AM

BikingBud said:

So the interest rate needs to be reset and the capital that would have been paid off during the period also needs to included in order to overpay and bring the date back to 1 Jul 2044?

Transferring a loan amount of X to a new 20 year mortgage, should lead to the same payments with the new lender, whether the mortgage runs from 1 July 2024 to 30 June 2044 or 9 July 2024 to 8 July 2044. So the only extra payments that OP has made are the interest they were charged between 1 July 2024 until 9 July 2024. If it was a repayment mortgage, then the small amount of capital repaid over those 8 days will have resulted in a slightly lower transfer mortgage amount to Virgin, so would still end up being paid, though it would have been paid to Virgin rather than to Barclays. The numbers OP posted of £49 a day, suggest what Optima legal are offering is based on an interest calculation only. Given the capital would be paid anyway to one of the lenders, then this is the right approach. Especially as Barclays seem to have calculated a redemption figure and then added interest.

jgreen1986 Posts: 2 Newbie

26 July at 11:12AM