Pay has gone to housing loan (now investment loan) instead of offset account

I hope his first step was to change the account details for his pay to go into the correct account !!
Marg

 

I would speak to the bank first thing. Explain the situation and politely request to transfer to offset. They may do it or they may ask for a redraw fee if applicable. Either way, assuming the funds were only there for a short time, it shouldn't be an issue regarding tax.

 

Are you sure there would be no issues? Wouldn't withdrawing the money create a mix use loan and strip the deductibility of whatever the amount put on the loan was?

 

Transferring it is not advisable as this will create a mixed purpose loan. Best to either leave it and put it down to a learning experience or try to get the bank to reverse it so that it never happened. For this to work it has to be removed from the statement totally. Since the employer made the payment they would probably have to advise the bank that it has gone to the wrong account.

 

Terry if you accidentally paid extra this month could you just skip next months payment? Essentially wouldn't it just be paying the interest for May and June at the same time? Could this avoid a mix use loan?

If that were the case, could he access a short term interest free loan from the bank of mum and dad and pay that back with what would have been June's mortgage payment?

It has me wondering as I'm about $500 ahead on one of my IO loans due to accidentally transferring small sums of cash onto it every now and then. As I'm not the sharpest tool in the shed I know It's only a matter of time before I accidentally transfer a large sum of money to the wrong account. Surely, when I do, there's a work around to get it back in a tax effective way?

 

If you skip the next month's repayment you would be in default of the loan. From a tax point of view it would probably be ok, but from a contract point of view you would be in breach. So you had better speak to your bank about this.

 

Easy to do with online banking.

I ended up renaming my accounts to avoid this, so they are now called. [address] mortgage and [address] offset when I see them online.

 

Really? Isn't it just the same as making early payments? If my loan repayments are $1k a month and I make the payment for June plus accidentally make another $1k Payment for June aren't I just ahead? I've taken care of June and July and don't have to worry again until August?

@Joynz I did that, still make the mistake. I'm just really not that intelligent

 

Yes. I though this was the case, about 10 years ago with ANZ i kept getting letters every month.

But you may actually ahead, but are still missing payments. So check with your lender first.

 

I always thought this. When paying extra on our house loan I always looked at it as being xxx months ahead. That was back in the days when we had a repayment book with vouchers for each month!!

But not according to the bank. Extra payments are ok, but do not remove the obligation to make the next month's payment.

Some banks now let you apply for a repayment holiday if you are ahead but it must be approved first.
Marg

 

Wow, this is good to know. I have done this with my bank and never heard from them.

 

I would ask it to be reversed if it will cause a shortage of funds. Do not re draw it as has been said.

I also like to keep all personal income in a completely different account to anyone I have a loan with, it is easier to watch that income is paid correctly & easy to transfer out to wherever needed.

 

I am sure most of us would have made the mistake and outsmarted ourselves, trying to save on interest or whatever, and click the wrong acc and sent money off, at one stage I had family accounts and quite a few of us had the same first initials and multiple accounts.....mistakes just waiting to happen