Interest paid goes up when balance goes down???

missislippy

I've just checked my mortgage statement online and noted that in March the interest paid on the outstanding balance was less than in April, when the balance was less. How can this be? Surely if the balance goes down, the interest paid should go down as well?

I've noted this on my credit card statements too (both with the Halifax by the way, if this makes any difference), that some months the interest paid is more even though the balance is less!

Anyone explain please?

LittleMissAspie

The interest is worked out per day. April is a day longer than March.

Thrugelmir

LittleMissAspie wrote: »

The interest is worked out per day. April is a day longer than March.

30 days April

31 Days March

sammyjammy

The interest on your credit card would also be based on the previous months balance not the current balance.

martinsurrey

Thrugelmir wrote: »

30 days April

31 Days March

March statement = Feb interest = 28 days

April statement = March interest = 30 days

LittleMissAspie

Thrugelmir wrote: »

30 days April

31 Days March

Do you know, I first wrote that March was a day longer, then went through the little rhyme in my head and somehow figured out that April was the longer month! I don't know how I managed that.

Anyway, if you divide the interest by the number of days there should be a downward trend each month.

missislippy

Ah, that explains it ..... sorry to be a bit thick about this, but I've never understood interest at all - and of course I HATE paying it!!
:T

Many thanks for your help.

rothchick

Also the interest for March was calculated from the 9th of March as that is the day they switched to the new system. So its actually interest form 9th March to the 31st of March where as April its 1st- 30th