Calculating Correct Monthly IO Amount With Offsets?

Hi All,
Occasionally on media we hear about lenders being caught-out incorrectly charging etc.
Why let them go unchecked (which I'm sure usually happens), trust them, or anyone else with our $'s.

Last month I renegotiated down to 3.89%, yesterday when looking at my online account I discovered it said 3.99%, when I called they admitted the error (8 key is next to 9 key I guess), that it would be recalculated/amended back to the agreed date.
But how can I trust/know they'll get that correct, or if they get it correct any other month considering the many debits/credits throughout the month in our offsets.

With Fixed or PI (no offset) it would be somewhat easier to check lenders are charging/deducting the correct monthly amount/s, however with fluctuating amounts going in/out of offsets it's messy, I have no idea how I could check/calculate their not getting it wrong, either intentionally or via some human input/tech error.

So considering all the debits/credits throughout the month in our offsets, is this something we all just foolishly live in hope/trust their getting correct, or is there someway, hopefully simple, to check/calculate their getting it correct, rather than perhaps ripping us off?

Cheers!

 

Not trying to derail the post but I think this may be a nice app idea.

There are a couple of apps out in the market that allows you to calculate PI, IO, additional repayments= how much interest/time saved in various interest rates, but there are none that allows you to calculate with the offset.

 

Since interest is calculated daily, it would be time consuming to calculate months or years going back. You could run a trial of one month as a sample and see if the interest charged for that month is correct.

You could do this in excel. In column 1 list all the dates for the month. In column 2 list the loan balance for each date. In column 3 list the offset balance for each date. On column 4 list the interest rate for each date. The formula for column 5 is the loan amount minus the offset amount for each date giving you the daily balance. The formula for column 6 is interest multiplied by daily balance divided by 365. Then add up column 6 for your monthly interest charge and compare that to your actual charge.

I have checked interest charges many times but I have never found an error. But then I have never had a loan with a big 4 bank which I am sure makes a difference.

There is software to check interest charges


Interest Checker

 

It would be hard to calculate on a regular basis as there are 30/31 days month to month.

With offset account, basically bank's cut off is 12am everyday. So you can technically go through the hassle by looking at your offset day by day how much is the balance by 12am.

And calculate the loan balance day by day with the agreed interest rate.

Compare your figures with what's being charged.

Normally if you get it right the variance should be within 5% difference.

 

This one needs to be spreadsheeted.

Daily opening balance (loan amount) less (offset amount) plus any charges = outstanding amount x applicable daily interest rate (nominal rate /365 days)

Repeat for the entire month etc

 

Yea its usually pretty easy to find almost anything online that will solve something, including a simple spreadsheet download, but most of whats available is the basics on most lenders websites.

I spent ages searching, including referenced posts on other forums, astounded how little discussion there is out there regarding this considering the huge amount of lending all over the world, personal and business, it's like everyone just accepts it...

I couldn't find any free and only a couple of paid, like most things the paid ones have negative reviews, including not being able to get in-touch with vendors for refunds.
offset_account

I would have thought accountancy software Co's (myob, quickbooks etc) would be offering something for this, imagine the huge multi-million dollar business lending, only have to be out by 0.0001% to potentially add up to thousands.

I'm a noob with spreadsheet formulas, be great to simply import QIF, CSV files etc into a program, minimal manual input, let it do its thing...
Gunna give Home Money Manager Pro a trial, currently got it on special for $97
Home Money Manager - Online Store - Buy Now

 

A few years ago there was a company on A Current Affair offering a similar service, they use their software to scan over your statements or something then they check to see if the bank has charged correctly. They charge a few hundred however the fee was waived if no errors were found. Apparently most had errors in banks favour