monthly interest payment date

sanova76

Hi, 

I've question on when the interest is calculated/charged every month.  Looking at my mortgage statement, my payment is on the 5th of every month, the statement for the interest is always show 23rd of the month.  Does it mean the interest is always calculated on the 23rd?  



Thanks. 

San 

housebuyer143

sanova76 said:

Hi, 

I've question on when the interest is calculated/charged every month.  Looking at my mortgage statement, my payment is on the 5th of every month, the statement for the interest is always show 23rd of the month.  Does it mean the interest is always calculated on the 23rd?  



Thanks. 

San 

Interest tends to be calculated daily, that might just be when it's out on the account 

ACG

As above, most lenders charge interest daily now. They might just calculate it and add it on a set day rather than showing £10 (for example) a day being added to your balance. 

sanova76

Thanks for the replies.  So I guess it won't make any difference whatever date  if I make a small overpayment.  Initially I thought if I make overpayment before the 23rd, the interest is not calculated yet 😅.  

General_Grant

Interest is calculated on the day's balance.  So making an overpayment will affect the balance on which interest is charged from that time forward.

If you pay £100 extra and monthly interest is calculated the next day, it won't work as though the £100 had reduced the balance for the whole of the month.