Offset Mortgage - Interest Question

moneysaymoneydo

Hi i have an offset mortgage and am curious re the interest it varies each month by approx £2.00 ie March £28.40 and April £27.40, obviously it will reduce by the amount my mortgage comes down but my question is if in my current account i am overdrawn usually by approx £100 does this affect how much interest i pay!

Cannon_Fodder

Number of days in the month, will probably be part of it.

getmore4less

The daily interest will vary if the amount offsetting changes

the number of days change each month.

Going overdrawn on an account might not be sensible it will depend on lender how the deal with this in an offset pool.

hillcats

The balance in your offset current account decreases as you live, taking out cash / DD's leaving your account etc. (Do you have any savings amounts offsetting your mortgage that change?) Also as already mentioned it would make sense that number of days per month would indeed have an effect due to daily interest calculation.

We also have an offset mortgage with savings accounts & current account linked with www.if.com and our interest varies due to same reasons only by the same figures you are talking about, we however live within our means and have never gone overdrawn, but it does appear that you are not being penalised for going O/D I would guess it is an authorised overdraft or are you seeing charges?