Broken Interest

C

Celt07

Registered User
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50
Just wondering if anyone can tell me what "broken interest" is? I have recently taken out a mortgage and received documents from the lender yesterday telling me the account number, when the first payment would be taken etc. They also stated that I had the option of sending in a cheque of over €700 for broken interest or it would be added to the account balance if I so wished.
 
Its the interest up to the first payment : i.e if you moved in on the 15th but the payment day is the 1st of the month - the broken interest is the amount due from when you moved in to the first of the month.
Adding it to the account balance will end up costing you a a good bit more than 900 over the life of the mortgage.
 
Never heard the term even though I've been in the banking business for years.

As a non-standard term, it should be defined in your terms and conditions document.

Recommend that you ask for further details
 
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