Fixed rate mortgage - Applied interest fluctuates up & down

Twiggy_34

We've just received our annual mortgage statement and I was wondering if anyone was able to help explain why the interest applied to our fixed rate mortgage fluctuates up and down so erratically (I'd thought it would consistently decrease as the balance goes down each month). Without digging out the paperwork I'm not sure whether interest is calculated monthly or not, but did consider this. However, the increases/decreases don't correlate with the month lengths... (It may also be worth noting that we're overpaying by just under the 20% allowance).

Here's an example of the fluctuations:

Date Interest Applied
1 July 2013 £257.84
1 August 2013 £248.67
1 Sept 2013 £255.92
1 Oct 2013 £245.85
1 Nov 2013 £253.02
1 Dec 2013 £243.93
1 Jan 2014 £251.09
1 Feb 2014 £250.12
1 March 2014 £225.07

Thanks in advance

Thrugelmir

Didn't number of days in the period for which interest is charged.

Interest is normally calculated daily and charged monthly.

Having said that some older mortgages work on an annual calculation basis. Though can be switched to the alternative method.

Are you allowed to overpay up to 20% on your fixed term mortgage without incurring a penalty?

Twiggy_34

Thrugelmir wrote: »

Didn't number of days in the period for which interest is charged.

Interest is normally calculated daily and charged monthly.

Thanks, I did consider this but didn't think that worked because of which months had the lower payments. In hindsight however I suppose that I need to look at the following months payment, e.g. February being the shortest month would then explain why this months payment was so much lower. I'll look closer at the sums! Edit: Have looked closer and I just wasn't taking into account the lengths of each month (and that it would affect the following months payment). Thanks

20% is the maximum we can overpay each month without incurring any penalties. We're actually just shy of this solely for nice round figures. The full 20% would take us to £519 a month but we've rounded it down to a nice even £500 a month