person img
verified icon broker img

Lawrence

2 months ago

Hi Stacey, The fixed interest rate means that the interest rate charged will not vary for the contracted fixed rate period. Actual interest charged per monthly cycle will vary depending on the number of days in each cycle. A $350000 loan at an interest rate of 4% will result in a daily interest charge of $38.36 per day. Your interest charge will reduce as you pay down the principal amount.

Report this reply as inappropriate:
Reason is required Message is required   or  Cancel
verified icon broker img

Morris

2 months ago

Hi Stacey, Most banks calculate the interest charges on the daily balance and charge your account monthly. Also bare in mind that all fixed loans apply a limited amount for extra repayments and will not be included in their daily calculations.

Report this reply as inappropriate:
Reason is required Message is required   or  Cancel
verified icon broker img

Michael

2 months ago

Hello Stacey, you interest will always vary with the amount of days in the month, but if you are paying the loan off (P&I) it will reduce slightly. So take a look at the dates the interest is charged and the days included since the last charge and it should make more sense. Happy to take a look at your statements if there is any more concerns. Regards, Michael

Report this reply as inappropriate:
Reason is required Message is required   or  Cancel
verified icon broker img

Michael

2 months ago

Morning Stacey The change each month relates to the number of days between interest being charged. Noting that banks typically charge interest on Monday to Friday the number of days calculated can be quite different month to month. Might be 28 in a short month like February and 31 or 32 in March. Depending on the size of you loan this can adjust interest charged quite a bit. As long as you pay the interest on the same day it is charged it does not effect the amount you pay over the year as there is still 365 days just sliced into 12 a bit different each year. Hope this helps.

Report this reply as inappropriate:
Reason is required Message is required   or  Cancel
broker img

Guido

2 months ago

Hi, Stacey. Thank you for your question. As above already mentioned the interest rate are calculated daily. You will haven difference amounts deducted; for example, if your mortgage amount is taken from your account on the 5th of each month. You can have a different interest amount as we have a month with 30 and with 31 days, on top of this if the 5th is on a Saturday and the bank is taking your repayment on the following Monday you have (2) two days more in interest payments. However, if you like you can contact me via the broker finder and email me your bank statement. I’m happy to check if your lender did the correct interest calculations. All the best Guido

Report this reply as inappropriate:
Reason is required Message is required   or  Cancel
broker img

Howard

2 months ago

Hi Stacey, the interest is calculated daily so a shorter month will have a lower interest charged, so Feb will be the lowest with only 28 days. If your loan is Principle and interest then the payment will stay the same but as you have noticed the interest component will vary, the term of the loan will stay the same. If your loan is interest only then the actual payment will change but you are not paying anything off the loan

Report this reply as inappropriate:
Reason is required Message is required   or  Cancel
verified icon broker img

Amy

2 months ago

Hi Stacey. The monthly interest charged does vary slightly depending on how many days are included in that billing ‘month’ (not identical to a calendar month). Sometimes there will be a shorter ‘month’ followed by a longer one, hence the notable variance to interest charges.

Report this reply as inappropriate:
Reason is required Message is required   or  Cancel

New home loans from 3.49%

Find out more