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Here are some frequently asked questions (FAQ’s) around mortgage balance outstanding:
The balance outstanding means the total amount you still owe on your mortgage at the point of that statement period end date.
This could be because of higher interest rates after the deal ends, or due to other common factors such as payment holidays, missed payments, added fees or charges or borrowing more on an existing arrangement.
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This could be because you are on an interest-only mortgage, or because there are increase charges and costs. Do you want to consider a remortgage? The mortgage broker can look and compare best mortgages for you.
If you have any charges, and these are no paid immediately, they are added to a sub-account and daily interest is applied to them until they are repaid.
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Overpayments will reduce the total mortgage balance from the day they are paid to your lender. Therefore, lowering future interest rate calculations. Though please note, this won’t change your regular amount that you pay each month unless something has been agreed.
You can either go via your mortgage lender’s website, or call customer service to request a redemption statement or closing balance.
It should cover the capital you initially borrow, plus any arrears, charges, adjustments or outstanding balance at statement end date.
Balance Outstanding
The balance outstanding is the amount you have left on your mortgage or loan. You may also see it written as the outstanding balance. It is the total sum remaining to be paid at the point the sum is calculated.
For example, you may be informed that the balance outstanding on your mortgage as of today is £239,500. You should receive an annual statement that reveals the remaining balance left to pay at the time the statement was prepared.
If you have online banking, you should be able to log into your account to see the outstanding balance on your mortgage in between statements.
How does the remaining balance change throughout the life of the loan?
This depends on the kind of loan you have. If you opted for an interest only home loan, the capital borrowed would remain the same throughout. You would only be required to pay the interest due each month, while the capital you borrowed would stay the same. Hence why this type of mortgage is now rarely seen. If you do have one, you should arrange to ensure you can pay off the capital by the end of the term.
With a repayment mortgage, your outstanding balance will gradually drop throughout the term of the loan. It drops much more quickly towards the end of the term, by which time most of your monthly payment goes towards the original loan amount rather than the interest it accrues.
Regardless of the sum owed or the interest rate, however, the balance outstanding always refers to the total remaining to be paid off.
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