Features and Benefits

Interest Calculated

Interest can be calculated on a mortgage annually, quarterly, monthly or daily. In recent years most lenders have started to calculate interest on a daily basis which benefits the borrower. On an interest only mortgage how interest is calculated is less important as you are not reducing your outstanding mortgage balance. On a repayment basis it is in the borrower's best interests to have interest calculated daily as all payments made to reduce the outstanding balance will reduce the amount of interest you are charged. This is particularly important if you are making regular or lump sum overpayments.