Fixed rate mortgages

Horse_Owner

I have two questions
1. I assumed that on a fixed rate mortgage the amount of interest added to the loan would be the same each month, or slightly lower as the balance goes lower, but some months have been higher than the month before. Can anyone explain?
2. Is it worth overpaying a fixed rate mortgage?

Welshlassie

It sounds like your mortagge interest is calculated daily and therefore your interest will vary month on month depending how many days there were in the prior month. It will also reduce as the capital reduces each month.

As long as your terms allow you to it is worth OP a fixed rate mortgage, it means you will have a smaller balance to remortgage when your fixed rate comes to an end. Do check your terms though as there may be Early Repayment Charges!

Horse_Owner

I meant overpay as opposed to saving in a bank account and using that money when I rearrange mortgage.
That makes sense about the interest being calculated daily. Why didn't I think of that?