Fixed Interest Rate Comparison Question

powerwin

Can the way lenders calculate interest payments have a bearing on how much you actually pay in interest? E.g. if say two lenders quote a 5 year deal at 3.57%, will you know that the amount of interest you would have to pay each lender would be exactly the same, or can the way each lender does the interest calculation mean you could be paying different amounts in interest, i.e. one is more expensive than the other?

Thanks

opinions4u

Most lenders calculate their interest daily.

But some will calculate annually, which typically will be slightly more expensive.

TrickyDicky101

Some (typically building societies, and those that previously were BS) will quote rates on the basis of repayments in advance rather than repayments in arrears. This can cause differences in repayment amounts.