Outstanding Balance on Mortgage

[paulocon]

Hi,

Have a variable rate mortgage with BOI. I have been keeping track of it using Online Banking. I notice that every so often, the balance on the mortgage will go up - I assume that this is because interest is applied maybe on a quarterly basis?

Am I correct in my assumption or is the balance of the mortgage calculated using some other method?

 

[Brendan Burgess]

Hi Paul

Yes. The interest is calculated every day but applied only once a month (possibly less often)

So the underlying balance on your mortgage rises every day until you make your monthly payment which reduces the balance.

But what you see on the statement is the balance reducing when the repayment is made and the balance increasing when the interest is applied.