Question about my Barclays offset mortgage

rednblack

Hi all,

Quick question - I have a Barclays offset mortgage - tracked at 0.99% above base rate. When I checked my mortgage balance online I noticed that the balance went up by about £200 from last months balance.

I pay £804 a month by direct debit, which was set last September (based on the interest rate at that time) and have overpaid by at least £200 each month (inc. Jan).

How can my mortgage balance have increased in one month - and yet at the same time they also tell me the mortgage term can be reduced from 9 years 4 months to 8 years 8 months by keeping to the same payment plan?

getmore4less

Barclays

Add the interest overnight on the last day of the month.
Take the DD on the 16th

So you always see a rise on the 1st and a reduction on the 16th(varies a bit if the 16th is a weekend)

You should get a monthly statement which shows this.

Robert_Sterling_3

I think that with a lot of lenders interest is payable on the first day of each month but you do not have to pay it on the first of the month. The interest due for each month is added to the outstanding balance on the first day of the month and your monthly payment is subtracted from the outstanding balance on the day the lender has cleared funds for the monthly payment. Surprisingly if your mortgage starts on, for example, the twenty first day of the month you still pay interest from the first day of the month. What a chiz.

This is my understanding of the way I think the Nationwide do there calculations.

If anyone knows otherwise please let me know.

rednblack

Thanks for your replie - although, I thought the interest on my mortgage was calculated daily?

Trying_to_be_good

Calculated daily, but added monthly.