Why does interest and capital paid vary from month to month

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corklad

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I'm looking at mortgage statements from Permanent TSB and I can't figure out why the interest and capital figures varies from month to month. I could understand that if interest went down every month slightly because it is calculated on the remaining capital balance but it seems to go up and down. Any of the mortgage amortization calculators show it going down slightly.

Can anyone explain this to me?

Code: 
Month   Payment       Capital    Interest (ex TRS)     
1        € 2,078.29    € 340.20    € 1,738.09
2        € 2,078.29    € 397.66    € 1,680.63
3        € 2,078.29    € 343.33    € 1,734.96
4        € 2,078.29    € 349.52    € 1,728.77
5        € 2,078.29    € 462.43    € 1,615.86
6        € 2,078.29    € 352.95    € 1,725.34
 
Calculated daily and there are different amount of days in the month. Interest should go down slightly over time as your outstanding balance reduces.
 
Abbeykiller said:
Calculated daily and there are different amount of days in the month. Interest should go down slightly over time as your outstanding balance reduces.
Click to expand...

Also have PTSB not increased their interest rates over the last 12 months. That changes the calculation and will push up interest part the month that change kicks in, when it ordinarily would reduced slightly each month.

drcalculator.com has a good free calculator by Karl Jeacle which will show you graphs etc. of interst versus capital.
 
Abbeykiller said:
Calculated daily and there are different amount of days in the month. Interest should go down slightly over time as your outstanding balance reduces.
Click to expand...

I didn't think about the number of days thing alright. It still doesn't explain it exactly though.

When I factor that in to the spreadsheet though to see the interest per day it still doesn't make sense from the amortization table I have. This is calculated on a fixed mortgage by the way.

Code: 
Month      Payment       Capital     Interest (ex TRS)    Num Days   Interest Per Day
Jul        € 2,078.29    € 340.20    € 1,738.09           31         € 56.07
Aug        € 2,078.29    € 397.66    € 1,680.63           31         € 54.21
Sep        € 2,078.29    € 343.33    € 1,734.96           30         € 57.83
Oct        € 2,078.29    € 349.52    € 1,728.77           31         € 55.77
Nov        € 2,078.29    € 462.43    € 1,615.86           30         € 53.86
Dev        € 2,078.29    € 352.95    € 1,725.34           31         € 55.66
 
Hi Corklad

So the rate is fixed. So the balance should be coming down.

Is it explained by the number of days with the weekends at the end of the month confusing things?

Ask ptsb for a copy of the calculation.

brendan
 
The number of days per month may not be based on the calendar days but on working days - you would need to read your mortgage contract to get the exact calculation used - it might depend on which day your payment was credited to the account, which might be differnet from one month to the next eg it falls on a Sat or Sun or depend on the time taken for the payment to reach the PTSB
 
jpd said:
The number of days per month may not be based on the calendar days but on working days - you would need to read your mortgage contract to get the exact calculation used - it might depend on which day your payment was credited to the account, which might be differnet from one month to the next eg it falls on a Sat or Sun or depend on the time taken for the payment to reach the PTSB
Click to expand...


and another variable is which day the TRS payment drops into the account
 
corklad said:
Month Payment Capital Interest (ex TRS)
1 € 2,078.29 € 340.20 € 1,738.09
2 € 2,078.29 € 397.66 € 1,680.63
3 € 2,078.29 € 343.33 € 1,734.96
4 € 2,078.29 € 349.52 € 1,728.77
5 € 2,078.29 € 462.43 € 1,615.86
6 € 2,078.29 € 352.95 € 1,725.34
Click to expand...

Why is only about 18% of your 2k payment going off the capital? What's the interest rate? Sorry I know this doesn't answer your original question I'm just wondering as in my own case (only 1 year into a mortgage) about half the repayment goes off the capital and the rest is interest.
 
Brendan Burgess said:
Is it explained by the number of days with the weekends at the end of the month confusing things?

Ask ptsb for a copy of the calculation.
Click to expand...

Possibly so. I'll be getting on to PTSB to query it alright. To be honest the yearly totals or interest probably add up fine but it is curious why the variations occur. I'll post up an explanation when I get it.

fizzelina said:
Why is only about 18% of your 2k payment going off the capital? What's the interest rate? Sorry I know this doesn't answer your original question I'm just wondering as in my own case (only 1 year into a mortgage) about half the repayment goes off the capital and the rest is interest.
Click to expand...

That data is from the second half of 2007. The rate was 4.99% fixed on a 35 year 400K mortgage. What rate are you on?
 
Just a small update...

I was on to PTSB and the explanation I got was that it is to do with the number of days in the month and the fact that the balance is coming down. I didn't quite agree with his explanation but he said he would post out the details. Will update again when I get that.
 
The interest pattern would make sense if the months were October - March i.e. if the lowest interest payment corresponded to February
 
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