Our AIB mortgage interest is only added quarterly. Does monthly payment go off the principal?

T

The Oggster

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Our AIB mortgage account had a debit of €809 in September labelled "INTEREST CHARGED". Last one was in June.

When we were with KBC I could use the pmt function in Excel to work out the payment and then I would calculate the month's interest and take this away from the payment to work out capital/interest portions of the payment. My calculations would exactly match our statements from KBC.

But if AIB are only charging this quarterly, does that mean the entire monthly payment is going off the capital? I know they calculate the interest daily so it probably works out the same but just wondering for my own records.
 
Yes. Interest is added to capital every quarter. Monthly your repayment are reducing capital.
I use the PMT function, unless you want specific calculations based on the exact number of days, it's close enough for most purposes. AIB are charging you slightly less interest as a result of less frequent capitalisation.
 
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