If you have ever had a sneaking suspicion that you always seem to pay more interest than you thought you owed, Times Money has uncovered evidence that, unfortunately, you are probably right.

Hidden clauses in small print and delays in payment processing when borrowers switch mortgage lender and repay credit cards and loans mean that Britons are collectively forking out an estimated £480 million a year in interest charges that could easily be avoided.

The practice of timing the repayment of debts to eke out additional interest from customers wherever possible, often without them even knowing, is rife among the UK's biggest banks and building societies. Though the way that interest is applied is written in lenders' terms and conditions, industry experts and consumer groups have condemned the artful tactics they use to earn extra interest as unjustifiable and unfair.

For instance, anyone who has ever remortgaged from one lender to another will most likely have shelled out unnecessary interest because a little-known clause in standard mortgage terms and conditions means that borrowers are charged a full day of interest by both lenders on the day of redemption.

The clause, applied by all the UK's large lenders, including Abbey, Halifax and Nationwide, means that the old lender charges interest “up to and including” the day of redemption, which in almost all cases is also the first day that interest starts accruing with the new lender, leading to double charging.

On an average loan of £125,000, this amounts to about £30 a time, according to the Council of Mortgage Lenders. With more than one million borrowers remortgaging every year, the practice yields at least £30 million in revenue for the industry.

Lenders justify the way that they apply interest by pointing out that they extend the loan up to the point that they receive the funds from the new lender, but cannot break down interest according to the precise time of the transfer in hours and minutes. This means that even if the funds are received from the new lender, via a solicitor, at 9am on the day of redemption, the old lender will still charge interest until midnight of that day.

However, experts call into question this explanation, because the same does not apply to savings or current accounts. Kevin Mountford, of Moneysupermarket.com, the comparison website, says: “Most banks have a cut-off point which varies but is usually about 3pm. Savings balances transferred before this time will receive the new rate of interest for that day. Equally, if you pay off your overdraft balance in cash before the cut-off point, not one of the biggest current account providers will charge interest on the balance for that day.”

However, with overdrafts banks have less to lose from prompt processing. The sums at stake are smaller, amounting to a loss of about 25p a day in interest on a £500 overdraft with a 17.2 per cent interest rate.

Ray Boulger, of John Charcol, the mortgage broker, says: “That there is one rule for overdrafts and savings and another for mortgages calls into question lenders' justification for the way that they apply interest to mortgages. If they can do it in one case, why not the other? This discrepancy makes it look very unfair.”

The only exception among the big mortgage lenders is Yorkshire Building Society. Like other lenders, the society charges interest up to and including the day of redemption, but it only starts charging interest to new customers on the second day of the new loan. A spokesman for the Yorkshire says: “We charge interest on the opening balance at the start of each day, ie, at 00.01am. Therefore, on the day that the mortgage is opened, we do not charge interest because there was no balance at the start of the day.”

However, homeowners who are with lenders that still charge interest monthly, rather than daily, will be forced to double-pay even more interest. Monthly mortgage interest calculations, which result in borrowers paying more interest because the debt is eroded more slowly, have largely disappeared in recent years after accusations that they are unfair. But some lenders, including Alliance & Leicester, Kent Reliance and Stroud & Swindon building societies, still charge a full month of interest to borrowers redeeming their loans, even if the funds are received on the first of the month.

The same is true for personal-loan customers who repay the full loan balance before the last three days of the month. Moneysupermarket.com says that lenders are making about £5.6 million a year by charging interest until the end of the month in which a loan is repaid.

Tim Moss, head of loans at Moneysupermarket, says: “If you want to repay a loan, you are better off waiting until three days before the end of the month. If you pay it off at the beginning, you will still be charged a full month's interest.”

Credit-card customers who do not clear their balance in full every month may also be paying more than they realise because they are charged interest on their previous balance for up to three days after they make a payment, according to Steve Willey, head of credit cards at Moneysupermarket. The website has calculated that this delay earns card providers an estimated £445 million a year.

Mr Willey says: “Most banks now use faster payments to and from current accounts. However, card companies have been reluctant to adopt the faster payments, most probably because, for them, the longer the payments take, the more money they make.”

Case Study: Double-charged

Paul McAllister, of Sevenoaks, Kent, contacted Times Money when he noticed that, on August 1, he was charged interest of £56.79 by his old lender, Northern Rock, and £67.85 by Abbey, his new lender, when he switched his £362,000 loan.

The 42-year-old commercial sales manager, left, contacted Northern Rock to query the payment and was told that it was standard practice and written in his terms and conditions. He then asked Abbey, which confirmed that it would have done the same thing.

“I thought it must be a mistake,” Mr McAllister says, “but then they both confirmed it. I could not believe that they were both charging me interest for the same day. Even after they explained the reason why, it still struck me as wrong.”

Mr McAllister's request for a refund from Northern Rock was turned down, but he is now awaiting a decision by the Financial Ombudsman Service, which is investigating his complaint. He asks: “If you can end a car insurance policy and start a new one the next day, why can the same not apply to mortgages?”