With a repayment mortgage, your monthly payment is split between repaying your principal balance and interest charges.

The principal is the amount you borrowed and have to pay back, and interest is what we charge for lending you the money.

Month on month, your principal balance will go down. By the end of your term, you’ll have repaid the loan in full.

There are two key bits of information to understanding your mortgage payments: interest is paid in arrears, and principal is paid in advance.

Mortgage interest is paid in arrears, which means after it is added to your account, not in advance.

So, if you complete on 15 January and pay on 15 February, your first mortgage payment on 15 Feb would include all of the interest accrued between 15 Jan and 15 Feb.

Conversely, the principal portion of your mortgage payment is paid in advance, for the following month.

Each principal payment reduces the balance you owe. This means that you'll pay interest on a smaller loan balance in the ensuing month.

Your first mortgage payment is due a month after you complete on your property.

This means that if you complete on 15 January, your first mortgage payment is due on 15 February.

But you get to choose your payment date (perhaps to align with utility bills or when you receive your salary). This date must be before your payment due date.

If you complete on 15 January and you’d like to pay on the 1st of the month, your first mortgage payment would be taken on 1 February. This is because a payment is due before 15th February.

This means that your first mortgage payment is made up of interest accrued from 15 January to 14 February and principal would be paid down from 15 February.

You can learn more about chosen payment days and payment periods here.