Setting up mortgage payments

[prl]

GnuCash's model of a mortgage is far to simpleminded for my needs. I 
think that part of the problem lies with the huge variety of mortgage 
products available to the GnuCash userbase. For example, I have no idea 
what a "mortgage escrow" is. I don't even know whether it's a familiar 
concept with a different name or a concept that simply doesn't exist in 
residential mortgages in Australia.

My mortgage is variable interest rate (two changes downwards in the last 
six months), interest is calculated daily and charged monthly, interest 
is capitalised back into the loan, my repayments are at a different 
interval (fortnightly) from the interest charges, I can make advance 
payments at any time, and I can draw against any advance payments at any 
time. The latter feature allows me to effectively use the mortgage as a 
high-interest, tax-free savings investment account (the "interest" is 
interest savings at the mortgate rate, 5.55% vs the savings investment 
account I was using, 3.25%).

This is all way too much for GnuCash's mortgage function to deal with. 
It assumes fixed rate, fixed term mortgages.

I have a scheduled transaction for my regular mortgage re-payments, 
manual transactions for advance payments and draws, and manual 
transactions entered at reconciliation for the interest charges. This 
treatment of interest is exactly the same as the way it GnuCash handles 
it in my savings and credit card accounts, except that the amount of the 
interest is much bigger :( Regular advance payments can easily be 
accommodated in this scheme by either rolling them into the regular 
mortgage payment of having separate scheduled transactions for the 
bank-mandated and the additional payments.

Peter

On 4/01/13 10:17, Dean Gibson wrote:
>
> On 2013-01-03 14:47, gnucash_rob wrote:
>> Hi Michael,
>>
>> ...
>> I assume gnucash will then calculate the interest on a daily basis on 
>> this
>> new principal amount including the overpayment, rather than just that
>> predicted by the standard formula?
>>
>
> No.  As I understand it (from my experience), the calculation is made 
> just once, when you set up the loan.  That's the problem.
>
> -- Dean
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