Fixed Rate but not fixed repayments..?

Hi all,
In discussions with a lender recently we were told that we could fix our rate but that this wouldn't fix our repayments. Because we are on an interest only term the payments will still fluctuate dependent upon the interest being charged for the month (days in the month).
This is the first time that I've come across this. My understanding and experience in the past, regardless of the repayment option, was that if you fixed the rate your repayments would also be locked in for that period too.

Has anyone ever come across this before?

 

Some lenders calculate repayments as 'Loan Amount x Fixed Interest rate / 12 months' which gives a constant repayment each month. Other calculate repayments as 'Loan Amount x Fixed Interest rate / 365 days (or 366 in a leap year) and then multiply that daily figure by the numbers of days in that specific month

It sounds like this lender is using the second option, you should still pay the same amount over the year.

 

Hey mate, comes down to how your bank is calculating the interest. But most banks calculate interest daily and then paid monthly. So greater interest would be accrued in months with 31 days, than months with 30 days. And Feb should always accrue the least interest (assuming your rate stays the same). Hope this helps. But if you bank uses the simple interest method (not sure if any do), then yes your payments should be all the same.

 

For most banks
Whilst IO calculating interest daily charged monthly, no option of weekly/fortnightly.
When P&I calculated on month, when option of weekly or fortnightly simply monthly divided by 2 or 4 which results in extra repayments.

 

Thanks guys appreciate the comments.
Calculations are relatively simple I know and the difference between 31 days and 30 days in my situation is about $10pm so I guess I'm just going to have to budget for a little more and send that across each month.
Honestly a fixed rate without a fixed repayment was not something I'd come across before.
My point for looking at fixed was for 'certainty in repayments each month', which is how it's always advertised not just certainty in rate. The semantics being we do have certainty in so far as the rate is not changing but the interest calculation is.
You learn something new everyday, as they say!

 

Just budget off 31days every month and wont have any issues.

 

I have seen lenders who nominate a MINIMUM amount and that can vary as long as you stay within the min / max...Like using a redraw in some respects but it work on the repayments not on drawing a new sum on the loan. It is rare I must say.

CBA had a Veridian facility a long while back as an example.

There is usually a minimum but if you are ahead you can shave down repayments say if you are on one income etc.

 

Or you could set the repayment to be debited from your offset account and saving having to manage two different accounts