Our offset account was NEVER linked

[wylie]

We have had loans with our bank for eight years and set up the account that hubby's pay and rents went into as an offset account against one particular loan. This loan (limit $100K) always fluctuated and the offset account never had a substantial amount in it for any length of time. The loan is interest only, so the interest fluctuated each month.

I had $50K sitting in this offset account for the full month of July and for the very first time in all those years I looked at the interest and thought "why isn't it substantially lower" for the month.

I called our bank, asked about which loan the offset account is linked to, saying it should be this particular loan. She said it clearly states on the original paperwork that this should have been the case but that it had NEVER been linked. She said she would send it away for investigation and get back to me.

We received a letter today (NO apology) stating we have been credited with just over $4000 for the eight years.

I'm posting this because until I had a large sum sitting there for a full month, I had never realised the account was not linked. Had the loan always been fully drawn I would have noticed earlier but it has been up and down over those eight years and the account balance of the linked account was never the same for two days in a row. There have been times when it has had thousands in it, but generally only for a day or so.

I would suggest others check with their bank that the offset account has actually been linked to the loan as per the paperwork.

I'm pleased to have this windfall, but it is long overdue and I would have appreciated an apology for the stuff up.

 

[ScottyB]

We have had loans with our bank for eight years and set up the account that hubby's pay and rents went into as an offset account against one particular loan. This loan (limit $100K) always fluctuated and the offset account never had a substantial amount in it for any length of time. The loan is interest only, so the interest fluctuated each month.

I had $50K sitting in this offset account for the full month of July and for the very first time in all those years I looked at the interest and thought "why isn't it substantially lower" for the month.

I called our bank, asked about which loan the offset account is linked to, saying it should be this particular loan. She said it clearly states on the original paperwork that this should have been the case but that it had NEVER been linked. She said she would send it away for investigation and get back to me.

We received a letter today (NO apology) stating we have been credited with just over $4000 for the eight years.

I'm posting this because until I had a large sum sitting there for a full month, I had never realised the account was not linked. Had the loan always been fully drawn I would have noticed earlier but it has been up and down over those eight years and the account balance of the linked account was never the same for two days in a row. There have been times when it has had thousands in it, but generally only for a day or so.

I would suggest others check with their bank that the offset account has actually been linked to the loan as per the paperwork.

I'm pleased to have this windfall, but it is long overdue and I would have appreciated an apology for the stuff up.

4k Sounds low to me for an 8 year period ask them for an exact breakdown of how they reached this figure.

I guarantee you they have short changed you!!

DO NOT accept this first offer, send them a response by registered mail saying you wish to raise the matter further and expect a response within X days.

You should be entitled to the full refund plus compensation

Regards

ScottyB

 

[streetie]

Can't you tell when you go on Internet banking?

At the end of every month I just look at my home loan account online and it says offset benefit $xxx.00

Maybe I'm just lucky and have a good bank

 

[Rolf Latham]

I'm pleased to have this windfall, but it is long overdue and I would have appreciated an apology for the stuff up.

that aint no windfall, you are just getting your money back that was always yours : )

lenders and apology....... tee hee, unlikely

t
rolf

 

[wylie]

that aint no windfall, you are just getting your money back that was always yours : )

I know it is my money that they are finally giving to me. I call it a "windfall" because if I got it each month I would not have it as a lump sum now .

Rolf, do you agree with the advice from ScottyB?

The lady in the initial phone call said the interest would be recalculated and the letter states "We refer to a request to recalculate interest on your home loan and its linked account xxxx due to these accounts not being linked. To correct this, we have completed an interest adjustment on your home loan for the period 21 January 2004 to 14 August 2012 and credited your account accordingly."

Would you think this has been done correctly? Or should I do as ScottyB suggests and ask for an exact break down and/or compensation?

 

[jrc77]

Wylie,

Can't you calculate it yourself with a spreadsheet and your statements?

Regards,

Jason

 

[BMan]

why should you have to waste your own time and calculate someone elses stuff up jsut to get your money back


should also ask for compensation

 

[Kirsti]

I'd say recalculate it yourself to be absolutely sure it's right. Not hard as long as you have all the statements (however, I am the accountant for a credit union and in the past I have spent entire working days recalculating interest for our stuff ups so sitting down with a spreadsheet doesn't phase me much).

If you don't want to do it I could maybe take a look for a share of any extra refund

The most likely thing they've missed is not compounding the interest. It will be interesting to see what you're charged for August tomorrow. It should have also been recalculated as though the $4000 was in there for the full month.

 

[WillG]

It might be difficult to recalculate the compounding effect if the balance in the offset was continually changing. Are the interest payments for the associated loan drawn directly from the offset account?
Do you have enough records to calculate the amounts? You will need every change in the offset account balance from 2004 and every interest rate change in the associated loan account
.

 

[coastymike]

You can use something like mortgage watchdog http://www.mortgagewatchdog.com.au/index.html

it is quite decent in checking this sort of stuff

 

[geoffw]

I've had a bank stuff up, where the bank had been charging me too high a rate. I used a spreadsheet to work out initially exactly what they were charging so that I could then work out if the adjustments were correct.

At that stage each day's interest payments were calculated daily at principal by annual interest rate divided by 365. Interestingly enough, the same formula if the year had 366 days. So on leap years the actually charged higher than the advertised interest rate by 1/365.

It turned out that their calculations were spot on.

 

[geoffw]

You can use something like mortgage watchdog http://www.mortgagewatchdog.com.au/index.html

it is quite decent in checking this sort of stuff

This has been mentioned a few times in the past. The website looks like an ad for a dodgy property seminar but it has been around for a number of years. they guarantee you will find a mistake or get your $198 back plus an extra $250.

 

[Rolf Latham]

Rolf, do you agree with the advice from ScottyB?

I would certainly make sure that the interest repaid is taking intoa ccount compound interest
ta

rolf

 

[thydzik]

set-up a spreadsheet and confirm 100% accurate. don't accept a cent less.

not too hard to do as long as you have all your statements for 7 years, or better yet can download them.

I have something similar, I will make it generic and attach.

 

[INXS]

Can't you tell when you go on Internet banking?

At the end of every month I just look at my home loan account online and it says offset benefit $xxx.00

Maybe I'm just lucky and have a good bank

Know of someone with Wpac who had a report on each statement telling them what the offset benefit was. Only problem was that the offset was not linked to the loan and they were not getting any benefit amount. Moral of the story don't believe what it says and check yourself directly from the statement entries.

 

[JustAsking]

Mortgage offset account setup

Would you think this has been done correctly? Or should I do as ScottyB suggests and ask for an exact break down and/or compensation?

Hi wylie, this same thing has recently happened to me, and has been a nightmare trying to get the bank to respond and work through this issue to the point where I submitted a complaint to the financial ombudsman service. Luckily the bank is now working on resolving this issue and calculate the adjustment figures.

I was wondering what the outcome was for you and whether you ended up requesting/getting compensation from the bank? I feel as though just getting the adjustment money back isn't right, especially when the bank, for me, have been stalling the process (not that I should be surprised!) They originally said they had looked through all my mortgage documents and had no details requesting an offset account to be setup. I informed them of the document I had where this was instructed and magically they found it within minutes!

Also wondering if anyone has a spreadsheet to calculate the adjustment figures they could post. Imagine it wouldn't be too difficult to create though.

Any thoughts/comments appreciated!

 

[wylie]

We were sent the workings. It went for many pages. I figured it was probably right, clearly had come from some sort of programme, but I wasn't prepared to calculate eight years' worth of "workings" as the set off account balance changed daily. (What is my time worth having to enter minimum 300 daily balance changes per year for eight or more years...?).

It is our main account and everything goes in and out of it.

I once entered information into a mortgage watchdog programme. It took forever, so I thought I'd accept their word that it was done correctly .

I'm grateful that we have the loans, but most things are stuffed up, like the request two years ago to fix and prepay several loans (7 I think it was). All sent in the same request, at least six weeks before the end of the financial year... two loans were dealt with and the remainder just ignored. That took a LOT of phone calls to fix.

They stuffed up our fixed/prepaid interest the year before that and the one before that again. I now make sure I don't book holidays for those last two weeks of the financial year because I know I will be chasing the bank to get it sorted out.

If we didn't need the bank we would be long gone.

 

[ansaurieng]

Hi,

How can you find out whether your offset account is linked to your morgage

THanks

 

[Rolf Latham]

I have a couple of these on the go at the moment

One has been an ongoing mess for months. We are talking about 500 k sitting in an offset that magically delinked all by itself: (

no hurry to fix it either : (



Hi Rolf



Offset reconstruction is a lengthy process and would take up to 6 weeks to completed, I have asked our processing team to treat below case as a matter of urgency, it will be actioned in 5 working days, once completed we will send client an interim statement showing the interest adjusted.



Regards

Martin

 

[rob_celicasx]

Once you get it sorted, sounds like a good time to find another lender.