Mortgage amount interest charged during first payment query.

H

help999

Registered User
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Hi i have Mortgage interest charged query.
Drew down with AIB on
29th April 279k
1st payemt paid 30th may 1077.90
Interest charged on 16th June 771.32

Running the numbers on Karls Calculator the interest amount charged is wrong.
It shows 499. But i was charged 771.32

Can anyone confirm if i was charged incorrectly.
 
Not sure anyone will be able to give you meaningful help without knowing your mortgage rate.

Not sure if this helps you but from their website: AIB charges interest on the reducing mortgage balance. It is calculated on a daily basis and charged quarterly in arrears.
 
skrooge said:
Not sure anyone will be able to give you meaningful help without knowing your mortgage rate.

Not sure if this helps you but from their website: AIB charges interest on the reducing mortgage balance. It is calculated on a daily basis and charged quarterly in arrears.
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Suger i had it in my heard but forgot to type it.
Its 2.15%.

Thanks
 
Looks fine to me, interest is calculated daily so its about €16 per day for you, multiple the number of days 48 my calculation and its roughly what was charged.

The payment in May has me confused though.
 
Paul O Mahoney said:
Looks fine to me, interest is calculated daily so its about €16 per day for you, multiple the number of days 48 my calculation and its roughly what was charged.

The payment in May has me confused though.
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My first mortgage repayment was in May 30th.
On the online banking app that whole payment came off the capital balance showing on the app.
Then in June 16th the Interest was charged.

Thanks
 
All figures looks ok to me. The May value looks correct assuming your term is about 29 years. Your interest calc of €499 is roughly what it would be if they added the interest in monthly but that's not how AIB do it.

Basically you pay monthly and every quarter AIB adds on the interest. Obviously 48 days is not a quarter but there's always a bit of settling down after drawdown. I'm guessing that June 16th and then every 3 months thereafter will be the date your interest is capitalised. It all works out more or less the same whichever approach you take.
 
skrooge said:
All figures looks ok to me. The May value looks correct assuming your term is about 29 years. Your interest calc of €499 is roughly what it would be if they added the interest in monthly but that's not how AIB do it.

Basically you pay monthly and every quarter AIB adds on the interest. Obviously 48 days is not a quarter but there's always a bit of settling down after drawdown. I'm guessing that June 16th and then every 3 months thereafter will be the date your interest is capitalised. It all works out more or less the same whichever approach you take.
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Thanks for your help that makes it easier to understand.
 
help999 said:
My first mortgage repayment was in May 30th.
On the online banking app that whole payment came off the capital balance showing on the app.
Then in June 16th the Interest was charged.

Thanks
Click to expand...
So the interest is okay its take time to smooth out. You next payment should be what you signed up for
 
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