interest on a Tracker Mortgage

U

underthehill

Guest
I have a 100,000 tracker mortgage and pay 460 a month payment. Every three months around the 21st March, June, September December the mortgage goes up, the latest over 550 euros. This number changes. So for example I owe the bank 92000 at the start of September after the 21st of September it will have gone up to 92500 approx. Is this normal I alway thought that the interest was in the montly payments since when the interest rates went up or down so did the montly payment. On a another note this site has been a great learning instrument for me Thanks
 
Hi underthehill

I am glad you have found the site useful.

The underlying balance on your mortgage changes every day in reality. Tomorrow you will owe one day's additional interest.

So if you never made a repayment, the amount would gradually creep up.

However, the statement shows interest being charged to the account only every quarter.

When you make repayments, the amount drops down by the amount of the repayment.

Does this make sense?
 
Thanks Brendan. I always thought that mortgages were something like paying installments on a car. I never knew it would increase as you paid. Everyday is a school day cheers
 
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