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Mortgage Interest

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  • 18-09-2013 2:58pm
    #1
    Triangla
    Registered Users Posts: 818 ✭✭✭


    A question on mortgage interest.

    Mortgage interest is calculated daily then applied every quarter.

    My question is this, if the interest rate is a tracker - for simplicity sake say ECB plus 1%, is the interest rate calculated every day based on the ECB plus 1% divided by days in the year and applied daily or based on the ECB plus 1% convertible daily?


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    #2
    Bank of Ireland: Billy
    Closed Accounts Posts: 1,066 ✭✭✭Bank of Ireland: Billy


    Hi Triangla,
     
    Apologies for the delay in responding to your query.
    The Mortgage Department have come back to us with the following response:
     
    Interest on a mortgage accrues daily on the current balance and is charged quarterly. This is applicable no matter what rate the customer is on – i.e. fixed, variable or Tracker variable. For example, daily interest on a €100,000 mortgage balance on a rate of ECB plus 1% (currently 1.5%) is calculated as follows: 100,000.00 x 1.50/36500 = €4.109589 daily interest accrued.
     
    Thanks
     

    Billy


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