Interest goes up and down on Fixed Rate...help?

Bambywamby

Hi there,

I was wondering if anybody could help me.

Our mortgage has a ten year fixed rate (we are in year 3 of 10.)
Our monthly mortgage payment is £988. Interest rate 5.34.

The question is....why does our monthly interest rate vary? It doesn't always go down...sometimes it goes up. October's interest was £710...Novembers was £731. We haven't done anything different to the mortgage...so why is it up and down? I assumed the interest would always go down...very slowly...but down.

Thanks in advance Bam x

laidbackgjr

It's not the interest rate that changes, it's the number of days in the month.

Interest is calculated daily, each month is not the same number of days, plus payment days can move with weekends / bank holiday. At £730 a month, that's about £23 a day, so one day less or one day more between the day interest is applied will account for the differences seen.

somethingcorporate

It's your payment that is fixed. The interest will be going down with time but will vary as per the great post above.

Thrugelmir

Bambywamby wrote: »

The question is....why does our monthly interest rate vary? It doesn't always go down...sometimes it goes up. October's interest was £710...Novembers was £731.

October 31 days
November 30 days

kingstreet

£161,178 x 5.34% = £8,606.90

£8,606.90 / 365 = £23.58 per day.

Interest for October £23.58 x 31 = £730.99

Interest for November £23.58 x 30 = £707.40.

The mortgage amount I've had to work back to, so it may be a £ or two either way. Are you sure November is higher than October? Do you pay in arrears or in advance?

In arrears, September's payment (30 days) would be taken in October and October's payment (31 days) would be taken in November.

In advance, November's payment (30 days) would be taken in October and December's (31 days) in November.

I almost used that annoying burgundy-jacketed muppet meercat's expression. M'eh.