I posted an inquiry about this the group back in January.
My question was about my mortgage lender charging what it called 'initial interest' on a mortgage. I completed on 22/12/04 on a loan of around £289k. The monthly payments are £1200.72. On Jan 1 they debited £1670-odd, i.e. they took ~42 days interest. The basis of this was that it was the monthly payment plus 10 days' worth of interest between 22/12/04 and 01/01/05. The extra amount was termed 'initial interest'.
As I saw it, and most here agreed, I should have paid £470-odd on Jan
1 and £1200.72 on Feb 1, and not the whole amount on Jan 1. Based in part on the replies here, I challenged this approach in a letter to the lender (C & G).
In their reply, which I've just received, they've conceded that the interest relates to the whole month and can be paid on any day of the month. They've agreed to change the collection date from the 1st to the 30th / 31st.
So effectively I am relieved of one payment over the 24 months of the introductory offer, which is a nice result.
Just thought I'd share. I'd had 2 interest-only mortgages previously and they both did this, but at the time I just figured I'd get the overrpayment back at remortgage. Now I'm not so sure, so I prefer this arrangement.