Daily interest rate calculation

clarew

Long time lurker back....following house move and loss of 1 income, am trying to restart our mortgage overpayments again.

I've lost the link to the simple way to calculate the daily interest rate (as that scared me into trying to pay bits off here and there!).

Mgage is 123,000 now at rate of 2.5%

(I remember dividing it by 365.25 to allow for leap years) but have confused myself in trying to calculate it.....can anyone point me in layman language-maths isn't my strong point-in what the calculation is please.)

Ps Mgage started at 185,000 so am pleased we are down to 123,000!! Can't wait til it's below 100,000 :-)

rockabelle

Hi Clarew

Simple calculation is (mortgage * interest rate/100)/365 for your daily rate, so it's currently £8.42. It obviously changes (slightly) every month as you repay the capital (so when you get to 120,000, it'll drop down to £8.22 a day).

(It's possible this isn't 100% accurate, depending on whether you pay interest on your interest throughout the month, but it'll only make fractions of pennies worth of difference, so probably not worth calculating!)

Hope this helps
Belle

Suarez

rockabelle wrote: »

Simple calculation is (mortgage * interest rate/100)/365 for your daily rate, so it's currently £8.42.
Belle

You don't need to divide by 100.

(mortgage * interest rate)/365

rockabelle

Suarez wrote: »

You don't need to divide by 100.

(mortgage * interest rate)/365

Totally true - I was just thinking that the OP might just put in the 2.5 rather than 0.025, and was trying to be helpful

clarew

Thank you both, and yes....simple is good for me as too many digits confuse me!
I remember when my interest was £20 a day so lovely to see how the impact of overpaying (plus regular Mgage payment and the Low base rate) has brought it down....let's hope the b of e don't hike the interest rates up too fast in the next year of so.