Why am I paying so much interest with every mortgage payment?!

TadleyBaggie

In fact the interest is most likely calculated daily but added monthly.

warby68

OP, the comments are sharp because the issue is so fundamental to how finance works (every borrowing and every savings product has interest over the life of it) that it is a huge concept not to have grasped before taking on a mortgage.

I would be curious how it got past the due diligence of the mortgage adviser/provider or did you just say you understood when you didn't?

As your mortgage appears to be over an exceptionally long period, is that because you thought it was free after the first 2.69% so might as well take the very low repayments. As a result, you may be paying a lot more interest than you need to and might want to explore the terms of your mortgage and consider overpayments. Certainly when your current product is up for review you might want to look at it all again.

trex227

If the interest rate was 2.69% for the whole term (which I realise it won’t be) over 35 years you’ll pay over £50,000 interest. Reduce the term to 20 years and it’s less than £30,000 interest.

If you can afford to pay more monthly when you remortgage reduce the term.

getmore4less

its the payment that decides the interest cost.

£95,500 2.69% £334pm interest £56,400
£95,500 2.69% £400pm interest £40,800
£95,500 2.69% £500pm interest £28,900
£95,500 2.69% £600pm interest £22,500

csgohan4

OP i hope you have read your terms and conditions for your mortgage. I also hope you don't make another mis sold thread on here

diggingdude

grumiofoundation wrote: »

(91047*0.0269)/12 = 204.1

I mean seriously you took out a mortgage without being aware how mortgage interest works?

Lots of people do, they want to buy a home and someone tells them it will cost x amount can you afford it? Alot of people don't sit down and do the math

csgohan4

diggingdude wrote: »

Lots of people do, they want to buy a home and someone tells them it will cost x amount can you afford it? Alot of people don't sit down and do the math

Which is why they try and have it on 20-30 years later when they forgot about how it worked at the time and think their mis sold