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morgages with daily interest

does anybody know how morgages, with daily interest , calculate the interest added?

Comments

  • Interest is calculated on the daily balance and generally applied monthly.
    Number 86 - Stole a car from a one legged woman... I'm just trying to be a better person
  • evosy1978
    evosy1978 Posts: 652 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    how does this differ from monthly calculating interest. which is the best.

    thanks
  • AHAR
    AHAR Posts: 984 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    Daily should be better I guess as your repayments will reduce the interest calculation within a day but monthly calculated mortgages won't 'notice' you've reduced the balance you're paying interest on for the duration of the gap between the payment being received and the interest being calculated again which could be almost a month later if the dates fall in an unfortunate way.
    If you have a mortgage which allows over-payments you'll want them to count towards your interest calculation as soon as possible.
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