Redraw Account for My Mortgage Always Shows Incorrect Balance

LSanAndreas23 on 04/11/2021 - 12:00

Hi OzBargain,

I currently hold a mortgage with uBank as it was the best deal I could find at the time. I don't check my mortgage balance very often, I just pay my dues when the time comes, always on time, with a bit of extra $$ on top always, even if its only $20-30.

To the point - I went to check my balance after a few months on the website and it was saying I have a negative -$83 balance in my redraw account.
I call up the bank and they say it is because the interest was charged on my redraw, but last time I checked, I believe (not 100% sure) my redraw account was nearing $1000 and my interest is only around $550 a month and also considering I ALWAYS pay more than the minimum amount how is this possible?

Does anyone else experience this with their banks? Ive had this issue before with them and I am considering refinancing if there are other banks where they actually display the correct info. Or maybe Im just incorrect, please enlighten me!

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Comments

  • MS Paint on 04/11/2021 - 12:06
    +3

    Is there a variation between your payment intervals and the interest calculated / deducted interval?

    Or maybe Im just incorrect

    If so, would that make it San Andreas Fault?

    • SanAndreas23 on 04/11/2021 - 12:29

      Like a value variation? Interest is never higher than a single fortnightly payment considering my extra amount paid on top. So usually I pay 2, sometimes 3 fortnightly payments and the interest gets charged at the end of the month.

      I thought maybe I am interpreting this incorrectly and its hard to know because its not like there is a redraw account history. Id have to calculate it using my statements which I wouldnt know where to start. I did redraw in April this year but I am sure I left at least 500-800 in there, and its been 7 months since.

      • freefall101 on 04/11/2021 - 13:22
        +2

        There's no transaction history available? That sounds very weird. I'd ask the bank to send you one. You should be able to get a repayment schedule of the entire loan too, so you can see what the balance should be at any time and what the balance actually was (with the variance presumably being the redraw)

        It should be pretty straight forward, cash go in, loan payments/interest go out. Are you sure the payments have been going in or someone else hasn't been making withdrawals? And check what date you took cash out, if you took it out on the 28th and interest was charged on the 30th then you would have gone into negative then. Also check if you've been charged any fees (are there annual loan fees or anything?)

        Seems only a question you or your bank could answer though, it would be extremely rare for them to be wrong.

        • SanAndreas23 on 04/11/2021 - 13:49

          No history for the redraw account only, I have statements which do show me debiting the redraw account and all my payments. However it would make it easier if there was something just for the redraw on its own.

          Is there an equation I can use to calculate this using my end of period totals? e.g. using total debits, credits, balance, and interest charged. If there is I can figure it out, but couldnt find any tools on google either.

          • redfox1200 on 04/11/2021 - 14:53

            @SanAndreas23: isn't the redraw account the same account as your homeloan?

            • SanAndreas23 on 04/11/2021 - 15:31

              @redfox1200: Well technically yes.

              But other than the balance it shows how am I supposed to know what is actually supposed to be in there if that makes sense.

  • Master Bates on 04/11/2021 - 13:07
    +1

    I think it's a timing thing, check in a few days and you should see the balance back up to where it was.

    I queried the same thing and it was something like they deduct the interest from your redraw facility before your monthly/fortnightly/weekly mortgage payment hits the account.

    • SanAndreas23 on 04/11/2021 - 13:50

      Thats right thats what they are telling me, but its still frustrating not knowing the amount, and what if I needed the money for an emergency?

      • Master Bates on 04/11/2021 - 13:53

        I suggest you don't keep emergency money in there, it should be in an instant access saving account. Redraws can take a couple of days to receive.

        In the grand scheme of things, $1000 isn't going to save you much off your mortgage interest anyway.

        • SanAndreas23 on 04/11/2021 - 14:15
          +1

          Thats true, I agree with you. I don't really want to use it as emergency money per se, I guess I mean if somehow all my money got cleaned out and that was my last resort haha.

          Yeah definitely not. I was looking to increase my repayments on the website and seeing that negative balance was just grinding my gears.

  • skinner on 04/11/2021 - 13:57
    +2

    Yes this is normal, the available redraw amount will change daily. They take off the amount of interest accrued and/or the next payment from available redraw. Basically covering themselves so you don't redraw, spend the money and then miss your next payment etc.

    • Master Bates on 04/11/2021 - 14:05

      That's a better explanation than mine.

      Basically covering themselves

      Typical Bank.

    • SanAndreas23 on 04/11/2021 - 14:17

      So this is the same with every bank? That's a bit upsetting. I'll keep checking and I'll update the post when its back to normal. Thanks everyone for your advice, makes me feel better about it at least.

    • SanAndreas23 on 10/11/2021 - 13:47

      Yep it was what you said. So I had $83 less than what the interest was and they just charged interest right out of there. Gotta love banks.

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