Capitalisation of Interest

Discussion in 'Introductions' started by Iamnew_here, 23rd Jun, 2022.

Join Australia's most dynamic and respected property investment community
  1. Iamnew_here

    Iamnew_here New Member

    Joined:
    23rd Jun, 2022
    Posts:
    3
    Location:
    Melbourne
    Hello everyone, I needed some general advice regarding clarity on offset account statement. My sister has a home loan (her outstanding loan balance is about $150K) for her PPOR. She told me that she has about $155K sitting in the mortgage offset account, and basically not paying any interest on the loan from last 6ish months. Today, she showed me her bank statement, which showed all the regular monthly repayments, but for the interest component, the description was used "Capitalisation $0.00"

    She has enough in her offset account so she isn't paying any interest, but the question is, is her bank capitalising the interest incorrectly? Meaning, they're temporarily pausing the interest and then they will add the interest back in the loan balance later on? She had this question. I don't know much about all these so thought to ask question here to the experts.