Bank Interest

[ahasla]

How can I calculate my mortgage interest rate so that I know my bank is not overcharging me?

 

[ClubMan]

You can estimate the figures using Karl Jeacle's mortgage calculator

Karl Jeacle's mortgage calculator updated

The precise figures may vary depending on how your lender calculates interest, owner occupier mortgage interest tax relief etc.

 

[TarfHead]

Any 3rd party mortgage calculator can only be indicative for what you should be paying. You should assume that the bank makes it's own calculations so you won't be able to balance it to the cent.

In other words, if the 3rd-party calculator offers you a lower repayment figure, don't assume that you're being overcharged.

 

[ClubMan]

How can I calculate my mortgage interest rate

Actually - do you really mean this or do you actually mean how can you calculate your mortgage repayments (interest and capital)?

 

[marksa]

You can only calculate the interest and capital cashflows on a customised spreadsheet with calculations of daily interest. (I have done this myself, and it is reasonably accurate, but only relevant to my mortgage).

You need a number of items -

1. When does the bank apply interest - the exact dates
2. What basis - ACT/365, ACT/360 - usually ACT/365 in Ireland, although the Euro in theory is ACT/360. This refers to the old interest calculation of P*T*R/100 = year's interest, but for 1 day's interest you either divide by 360 or 365. Relevant if you are accruing interest for say 25 days at one rate on a particular amount, and then 6 days on a different amount (say after monthly payment.)
3. When are your repayments effective as of (particularly relevant in INBS!), the bank may only give you value for it and month-end for example.
4. If you make bullet payments to a variable/ECB tracker, when are you given value for it - again is it on the day, or at month-end, quarter etc.
5. Oh yeah, and what interest rate, and if any changes, when are they effective as of.

In other words, you ain't gonna find it easy, and should look at the terms of your mortgage with some degree of detail. I presume if you are not entirely happy, perhaps ask the bank for an explanation of the calculations. Not sure of their obligations to supply it!