Daily interest

oldenufftoknowbetter

Hi first post (well wrote it once and lost it all) been around reading for a while though.
Have so far been remortgaging every 2 years to get best deals and have managed to cut the term by a good few years by doing this currently have a tracker mortgage which has interest calculated daily.

What effect would paying weekly rather than monthly have on the cost/term overall, if the lender will allow this ? (I'm paid weekly)

Also is they way I'm managing the mortgage efficent or could I save more another way?

Ian_W

Hi oldenuff & welcome,
Don't think your lender will allow you to pay weekly [check though], whilst you would save money doing so, it would cost them more admin wise. Usual T&C's are monthly by DD.

As the amount owed gets less, the biennial remortgage fees take on a greater importance. Sometimes a higher % interest rate with lower fees is cheaper on a smaller mortgage than the other way around. Just something to remember for the future. Otherwise I can't see anything in what you've posted where you could make savings.

grumbler

oldenufftoknowbetter wrote:

...What effect would paying weekly rather than monthly have on the cost/term overall, if the lender will allow this ? (I'm paid weekly)

Well, arithmetics is very simple.
For 5% APR weekly rate is about 0.1%.
If, for example, instead of paying £400 every month, you pay £100 every week, you will save (very rough estimation)

£100*3*0.1%+£100*2*0.1%+£100*1*0.1%=£100*(3+2+1)*0.1%=£0.60

every month, i.e. about £7 :eek: every year ...

oldenufftoknowbetter

Thanks for the replys
Looking at those figures for the saving of £7 a year I think we will leave it as is.