Change to mortgage P&I caused by extra payment

[JimR]

Thanks Peter.  The mortgage is actually variable 2.75%, but locked at
that rate for the first 5 years.  After that, it can only change once
each year.

JimR


On 12/23/2016 12:57 AM, prl wrote:
> 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?
>>
>