Hi - Im NoLongerInDenial And I dont want a mortgage anymore

going_nowhere_fast

Hi,
I'd like to subscribe to your thread to see how you get on. You sound very determined and resourceful and I look forward to congratulating you when you achieve your goals.

Hurdler

Goodness - what a start! Will keep an eye out for your progress.

midnight_child

Monthly interest:

Take the amount of money you owe on your mortgage and multiply it by the interest rate. This gives you the figure for the year so you then divide by 12 to get an averaged figure. As some months have different numbers of days in you can divide the annual figure by 365 and then multiply by 30 or 31 as appropriate.

Example: If balance is 100K and interest is 3% (used for ease of this mock calculation) then 100K x 3% = £3000.
3000 divided by 12 = £250

If you know your way around a spreadsheet its fairly quick to set this up for every month over the lifetime of the mortgage.
Mine takes into account the leap years

MC

nolongerindenial

Thank you, I work my monthly accounts on a rolling 30.44 day basis (365.25 / 12 - average number of days per month including leap year to 2DP)

How accurate is that, I had considered doing it that way but as mortgage interest on the account is calculated daily, I would have thought that does not take into account the compounded interest..

For ease of figures using 0.1% as the daily interest (well excessive I know) and a 100k mortage.

Day 1: £100,000 Balance + £100 interest (0.1% interest for day) = £100,100 end of day balance
Day 2: £100,100 Balance + £100.10 interest (0.1% interest for day)= £100,200.10 end of day balance
Day 3: £100,100 Balance + £100.20 interest (0.1% interest for day)= £100,300.30 end of day balance

I know the daily interest is way less than this, but its just a exploded example of the compound interest that the mortgage companies use to calculate the balance..

Sorry if im really overcomplicating it, but its in my nature to be as precise as I can be (I once told a debt collector I had made a slot to speak to them at 4:05 pm for 5 minutes whilst I was walking between meetings (one meeting finished at 4pm, allowed 2-3 minutes clearing up time), and had another meeting due to start at 4:15 in the same room so had to have 2-3 minutes prep time) and if they wanted to push the call over there allocated 5 minutes as they claimed it would only take 2-3 minutes of my time id simply hang up on them at 4:11 to prepare for my next meeting, they called at 4:10 and got hung up on after 60 seconds)

midnight_child

Surely the interest is "calculated" daily, but "applied" monthly.

I dont think it would make any difference unless you are making overpayments every other day.

MC

nolongerindenial

midnight_child wrote: »

Surely the interest is "calculated" daily, but "applied" monthly.

I dont think it would make any difference unless you are making overpayments every other day.

MC

Good Point :j

ill get my system calculating the reducing balance based upon your calculations from above :j