Dumping six months' worth of repayments into a P&I fixed rate loan

I have a Westpac P&I loan, fixed for two years, and I believe I can deposit up to $30k extra repayments into that loan during the fixed term.

Instead of moving funds to that P&I fixed rate loan each month before the loan repayment due date, if I transfer funds to put the loan six months in advance, will that lump sum actually save me any interest.

 

Ok. Thanks @KayTea and @Peter_Tersteeg.

I've dumped extra funds into loans when we've been going overseas, enough to cover the payments while we are gone, but I don't want to tempt fate by getting it wrong.

So I'll leave things alone.

 

Having a rethink about this answer...

I don't think I'm redrawing. Each month, sometimes three weeks before the due date, I transfer enough funds to cover the loan repayment. In internet banking in shows up in the "available" column. On the date the payment is due, it disappears from the "available" column and goes off the loan balance.

I've never set up automatic payments for any of our loans because I prefer to pay them when it suits me, and that often means I move funds to the loan and it sits in the "available" column until the bank uses it to make the monthly payment.

Last month, for one of our fixed P&I loans I already had enough for next month's payment and accidentally transferred another month's worth. So, clearly Westpac has no problem with be being ahead by a month or two.

One IO loan I've paid in advance for a whole twelve months and the "available" just gets smaller as each monthly payment goes across to the loan.

But I've had other issues with Westpac over many years, so perhaps I'll not tempt fate.

 

Thanks Peter. Right now I have two months dumped into one fixed P&I loan. In two days one payment will come out and this happens with all my loans every month.

When we went overseas for two months last year, at least one loan was already P&I and I dumped three months in at that time into all our loans with no issues.

To be honest, I could call the bank, but I've spent most of 2018 holding on with Telstra and I don't think I could make a call to a bank right now.

 

Hugely different even. Its almost a sub market

fixed rate loans vary from tiny little extra repayments allowed during the fixed term to 100 % offset and fully pay down with unlimited redraw

typically, many of the smaller lenders have the best flex in additional repayment options

ta
rolf

 

Thanks all. In my experience I've dumped two or three months' worth of repayments into loans with no issues. But my loans are changing from IO to P&I and that makes a difference I believe.

The loan I accidentally paid two months into had one monthly repayment taken from "available" a few days ago. Next month's repayment is sitting there still.

I've not been charged anything so far on these loans and one IO loan I pay a whole year in advance (NOT prepaying interest, documented etc - just put a year's worth of repayments into the loan which is drawn of month by month).

I can call the bank, but the pain of going through having hubby identify himself isn't worth it. I'll keep all funds in the offset and just put enough into the loans to cover our overseas trip.

 

I’ve been told we can go into a branch and they will set us up under the business area of internet banking, allowing me to discuss the two loans I currently cannot discuss. I was told (several times) I can do nothing over the phone, and we cannot simply have hubby sign something to allow me to discuss all of our loans.

I also was advised to be very sure to include all loans and accounting to this new “business” set up to ensure everything is included.

Knowing how “hit and miss” our bank has been with failing to deduct documented prepaid interest almost every single year we have arranged it, we decided not to risk making any changes. Goodness knows - we could end up worse off.