Daily interest calculation?

oneashleym

I have a fixed rate mortgage with the Nationwide, and for the last year have kept a daily interest spreadsheet to see how much my overpayment has saved me in the long run.

However, from January 1st, despite there being no change in the amount owed or interest rate, the payment went up by 4.5p per day - not a huge amount in itself, but £15 over a year!

Can anyone shed any light on why this has happened?

opinions4u

2008 was a leap year?

Multiply last year's daily rate by 366 and this year's by 365 - if it comes out the same you have your answer.

I would also guess that you owe in the region of £300k.

feisty1

Try Nationwide

08457 30 20 10
Mon - Fri 8.00am - 8.00pm
Sat 9.00am - 5.00pm

feisty1

opinions4u wrote: »

2008 was a leap year?

damn! did i miss out!

oneashleym

Thanks opinions4u and feisty1 - I've been in touch with the Nationwide and asked about this, but they say it's not a leap year thing and it's just normal - but my spreadsheet says otherwise - they're sending me a statement showing their calculations, so I'll wait and see. BTW the mortgage is only 130k!

opinions4u

oneashleym wrote: »

Thanks opinions4u and feisty1 - I've been in touch with the Nationwide and asked about this, but they say it's not a leap year thing and it's just normal - but my spreadsheet says otherwise - they're sending me a statement showing their calculations, so I'll wait and see. BTW the mortgage is only 130k!

My £300k was a duff calculation - sorry. Got 14.5p in to my head!

It is a leap year thing.

£130k at 4.75% = £16.918p a day in a normal year and £16.872p in a leap year.

Difference there is 4.6p a day.

So your rate is about 4.75% give a take a fraction.

oneashleym

Interesting thought - looking back at my spreadsheet, I found that I was charged no interest on Feb 29th - so still not sure about that. My rate is fixed at 5.18%
The thing that bugs me is that I have every single days interest noted over the last year, and each month I pay my mortgage payment on the 16th and an overpayment about two days later. The amount I pay goes down on each of those two days, but only varies by about 1p on other days, except for at the start of this year.

opinions4u

I was so sure I'd cracked it!

tuggy12

I would say it's to do with the 365/366 number of days.
The person at Nationwide probably didn't understand what you were on about.
I once visited a Halifax branch office to talk to a 'Customer Advisor' and it quickly became obvious she didn't even understand the difference between simple and compound interest!