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How to calculate interest on charging order


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I have a charging order secured against an ex landlords property. This was for an amount around £10,000 with interest allowed to be added at a rate of 8% per annum. The landlord has made no payments to account and the charging order was granted almost 3 years ago. I am in process of writing a letter to the landlord and need to work out how much now will be owed. Do i add interest on annually onto interest already incurred? if that makes sense. Or is the interest just on the original £10,000 debt?

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  • 3 months later...



You are entitled to simple interest and not compound interest which is charged by most banks.


It is simple to calculate! In your case you are entitled to £10,000 x 8% = £800 per year which will be £800 x 3 = £2,400.


You will also be entitled to daily interest in the fourth year up to the day of redemption which is the day that the debt and interest is paid in full. The daily rate of interest is the annual rate divided by 365. In your case it will be £800 / 365 = £2.19. You multiply £2.19 x the number of days in the fourth year and add this to £2,400 to calculate the total amount due.


You can also apply to the Court for an Order for Sale of the property. The Court has a discretion whether to make an Order for Sale, however, the Court will generally be likely to make an Order for Sale of an investment property where the Judgment Debtor has ignored the Judgment Debt for more than 3 years. The Defendant will usually be ordered to pay costs of the application if an Order for Sale is made.


Good luck!

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