Capitalisation of interest on a buy-to-let mortgage

Instructed by a national mortgage provider (Claimant) in relation to a buy-to-let mortgage that had fallen into arrears and where the property had been made subject of an LPA Receivership and subsequently sold. The sale proceeds were not sufficient to settle the outstanding mortgage loan and the Claimant therefore sued the mortgagees (Defendants) for the shortfall. The Defendant counter-claimed stating that they were not in arrears, and were only in ‘arrears’ due to the wrong rate of interest being charged on the buy-to-let loan. We were asked to calculate the shortfall due to the Claimant on a number of bases.