How is interest applied through the month

craig7872

Can anybody please help me understand how my interest is applied through a month on my mortgage, as my balance seems to change numerous times in that period. I bank with Nationwide on a standard rate??

Thanks in advance:j

pollyanna24

I check my mortgage balance every day on the internet (yes, I know, very sad), but I worked out a very basic formula for the daily interest. I'm sure there are people on here who use much more complicated ones, but this works for me.

Balance of mortgage x whatever rate you are paying (for me, it is 2.5 so I times the balance by 0.025). This gives me the interest I pay over a year.

Then I divide the answer by 365 to get a daily rate.

Of course, this is very general as every month, the mortgage goes down a little if you are repaying the capital, but it works enough for me.

ACG

Interest is charged daily, the monthly repayments will depend on how many days are in the month.