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Calculating Interest
Sideways
Posts: 124 Forumite
Hi
Can someone confirm for me how banks calculate the amount of interest to charge you each month, based on a repayment mortgage that has its interest calculated daily.
These are my figures and my result, is this correct, if not please advise me.-
Mortgage Balance: £38k (over eleven years, currently overpaying by £250~£300pm, hope to be mortgage free in six-seven years)
Rate: 5.2% (fixed for five years)
My monthly payments are around £410.00
How I calculated- £38k x 5.2% (£1976) shared by 12 (months) = £164 –ish.
So I am currently paying around £164.00 a month in interest. Is this correct or have I got the wrong end of the stick?
Thanks
Can someone confirm for me how banks calculate the amount of interest to charge you each month, based on a repayment mortgage that has its interest calculated daily.
These are my figures and my result, is this correct, if not please advise me.-
Mortgage Balance: £38k (over eleven years, currently overpaying by £250~£300pm, hope to be mortgage free in six-seven years)
Rate: 5.2% (fixed for five years)
My monthly payments are around £410.00
How I calculated- £38k x 5.2% (£1976) shared by 12 (months) = £164 –ish.
So I am currently paying around £164.00 a month in interest. Is this correct or have I got the wrong end of the stick?
Thanks
Father, Husband, Jogger, Painter. Mostly at the same time, except the jogging and painting bit, it didnt work out.
0
Comments
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That's right. £164 ish at the moment. And because it's repayment, the balance will fall and the interest element reduce - and the capital element increase - as time goes by.0
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Many thanks M.Father, Husband, Jogger, Painter. Mostly at the same time, except the jogging and painting bit, it didnt work out.0
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