Setting up mortgage payments

[prl]

On 9/01/13 03:33, Derek Atkins wrote:
> prl <prl at ozemail.com.au> writes:
>
>> Even balance-at-date is insufficient for calculating my mortgage interest.
> Oh?  And why is that?
>
Because my interest rate can change on days when there is no 
transaction, interest is calculated daily (and debited monthly) and my 
payments are fortnightly. For example, my last interest rate change was 
on 24 Dec. My payments were on 21 Dec and 4 Jan. Interest was debited on 
31 Dec. I've had two interest rate changes since the loan commenced in July.

The Reserve Bank of Australian reviews government short-term loan rates 
to banks on a monthly basis. If the RBA decides to change its rates, 
then a change in existing variable-rate mortgages follows within about a 
month. Occasionally banks change their variable mortgage rates in the 
absence of an RBA rate change.

I can make additional payments or withdrawals against advance payments 
at any time.

These features are not at all unusual in variable rate mortgages in 
Australia, and a large majority of home loans in Australia are variable 
rate.

I could mark interest rate changes with a dummy transaction (that's how 
they appear on my bank statement) to create a balance on the day that 
interest changes.

While it would be possible for me to calculate interest using 
balance-at-date, it would be clumsy at best, requiring me to tweak the 
calculation every month. This is because even in the absence of rate 
changes and advance payments or withdrawals, my payments are 
fortnightly, and so fall on different dates each month. In two months 
each year there are three payments in the month. That means there are 
three or four periods with different balances in a month. The formula 
for the month's interest would be very messy, even in the simplest case 
where there are only regular payments and normal interest debits.

Would you think it worth the effort?

Peter