Change to mortgage P&I caused by extra payment

[prl]

There are lots of mortgage products where the GNUCash mortgage 
calculator is of little use. Having an interest rate that can vary 
during the term of the loan, mortgage offset accounts* and early payment 
of part of the principal (as you did) will all throw its rather simple 
view of mortgages out the window. Even for those mortgages where 
GNUCash's view of the world matches the bank's, the bank's exact 
rounding formulas can still throw out the interest calculation so that 
GNUCash doesn't exactly match the bank's calculation.

Fully fixed-term fixed-interest mortgages for the whole principal are 
unusual here in Australia. Less so, I understand, in the USA.

You could re-do the mortgage schedule from the next month after your 
additional payment, and than again after any further additional payments 
you make.

When we last had a mortgage, it was variable interest, had the ability 
to have a mortgage offset account (which we didn't use), and the ability 
to redraw against any advance payments we'd made. We didn't use the 
redraw facility, but we made advance payments most months.

I just ran a spreadsheet to calculate an approximate interest amount, 
and compared that to the bank's interest to make sure there weren't any 
major discrepancies.

Peter

* An account that doesn't pay interest, but whose balance is subtracted 
from the loan balance when calculating the mortgage's monthly interest 
amount. In Australia, this has both value and tax advantages, because 
you're effectively earning the interest rate of the mortgage on the sum 
in the offset account, but it's not counted as income by the tax office. 
I didn't use it on our mortgage, because there was a fee of nearly 
AUD100/year, whereas there was no fee on using the advance 
payments/redraw facility, which has the same value and tax advantages.

On 23/12/2016 14:12, JimR wrote:
> Longtime GNUCash user, I could not get my mortgage principal and 
> interest from the "Mortgage and Loan Repayment" to match exactly what 
> my bank was reporting.
>
> Earlier this year, I refinanced my mortgage with the same bank. This 
> amounted to paying out the old mortgage, and creating a brand new 
> one.  I was thrilled that for months, it was matching to the penny.  
> Then I went to the bank and made an additional payment directly 
> against the outstanding principal.  After that, the GNUCash M&LR 
> figures no longer match.  It seems that this extra principal payment 
> has the effect of adjusting my monthly payments so that more of each 
> subsequent months' payment goes against the outstanding principal and 
> less against the interest.
>
> However, my "Mortgage and Loan Repayment" in GNUcash does not 
> recognize this.  What is the correct process to make this work? Do I 
> have to delete the saved template in the M&LR template, and enter a 
> new one with the adjusted outstanding principal?  I try to make these 
> extra payments once a year, so that would be a bit of a pain.
>
> Suggestions?
>