14-06-2017 11:07 PM - edited 14-06-2017 11:11 PM
I transferred a small lump sum from my transaction account to home loan account via internet banking thinking this would be treated as the loan principal repayment. I used to make principal payments this way when I was with ANZ before.
However, the internet banking screen shows that my loan balance stays the same and the small lump sum I transferred is appearing as "available balance". Is this treated as advance mortgage interest payment? If so, this is not what I intended. If I transfer this amount out of loan account and back into the transaction account, will it be treated as redraw and redraw fee would be charged?
Looking forward to your advice. Thanks. J.
15-06-2017 11:25 AM - edited 28-07-2017 10:36 AM
Thanks for the question @59564938! For security reasons we can't access or discuss any personal information via the forum, so we'd need to speak with you over the phone to assist with this, if you can call our Contact Centre on 13 17 19 between 8am - 8pm your local time, or chat with us through your online banking so we can look into this for you.
As a general rule, additional payments made to your home loan above and beyond the minimum monthly repayment (if the loans is principal and interest) or interest amount (if the loan is interest only) will stay in the available balance of the home loan. Any funds in this balance are used to reduce the amount of interest that's charged to your loan.
If you'd like this balance used to reduce the principal of your loan we will require your request in writing.
This letter must contain the following;
1: Full names of all account related parties
2: Your loan account number
3: Amount you would like the loan limit to be reduced to
4: All account holder signatures (this letter must be printed and signed by hand as we cannot accept electronic signatures)
5: A day time contact number for all parties
You're welcome to scan and return your signed written instructions through your online banking via BankMail.
I hope this helps!
on 18-10-2017 07:56 AM
Thanks for your response, as I have a very similar question.
With our homeloan package, we're capped at $10K additional repayments each year, and have been advised there's penalty fees for going above this amount, but no-one from BankWest can point me to a document that details what these fees are, or whether this is applied to a calendar year or from when the loan was started.
Regardless, say we put $10K in for the first year, it just sits as available balance like the original poster stated. So to clarify, to have this $10K taken from the available pool and deducted from the principal amount, we need to write a letter specifically requesting this?
If so, does this mean that any amount sitting as an additional amount in the loan would be treated as a repayment and we'd be penalised, or because this is available for redraw, it wouldn't be factored in, and only the $10K per year that we write a specific letter for is counted?
I look forward to you clarifying this for me.
on 18-10-2017 02:15 PM
Thanks for your enquiry @MissBoots80, hopefully I can help to clarify some things for you.
The $10K cap on surplus funds in your Fixed Rate Home Loan account, resets each year on the anniversary date - being the date your loan was originally disbursed. The fees for going above this vary based on a number of factors, and you can find more information on this on the Fixed Rate Loan Contract.
You are correct - any deduction you wish to make to the principal amount you borrowed does need to be in writing as above. It is important to note here that if you have a Fixed Rate Home Loan, requesting this will incur a break fee, as technically this would be a change to the current contract in place due to the loan amount outlined being amended.
You can have up to $10K (accruing annually) sitting as "Available Funds" in the loan at all times if you would like, it's only if you then pay over and above the minimum monthly repayment amount as well that you could be penalised for going outside of the loan terms and conditions. Amounts available for redraw will remain - not counted as a repayment but rather reducing the amount of interest you are paying - unless you specifically request in your letter that you would like to use these funds to reduce the principal of your loan.
As long as you ensure that there is no more than $10K available as surplus funds for each year that your loan has been open (using the disbursal date as your reference for when the year rolls over) then there would be no penalty. To clarify, you can have up to $10K available in the first year, up to $20K in the second year, and so on.
I hope this helps.