Incidence of interest calculation
The mortgage definition for Incidence of interest calculation:
The frequency that the outstanding interest and ongoing mortgage repayments are calculated. Charging interest on the outstanding balance of your loan at the end of each day, means you reap immediate benefits of any repayments you make, since you will be charged interest on a smaller debt each day. As long as you are making payments on time, the more often interest is calculated the better for you. This is a common feature of flexible mortgages, but is not restricted solely to them. When interest is calculated annually, repayments are not updated to include the reduction in capital that arises from the payments you make throughout the year.
Standard payment calculationStandard payment calculation
A calculation that is used to determine the monthly payment necessary to repay the balance of a home loan in equal installments.
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