Plan For The Future

Worried about interest rate rises? Want to find out how to pay off your mortgage sooner? The following reports will give you answers and keep you informed as you circumstances change:
    
   8.  Increase Repayments Report
   9.  Detailed Payout Plan Report
 10.  Interest Rate Rise Report
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8. Increase Repayments Report

Can you really save thousands if you increase your repayments by the smallest of amounts? This report will show you. Enter a New Repayment Amount and instantly see how much you can save in interest and how much sooner you will repay your mortgage.

When you first open the report (or press the Reset button), the report will use the latest loan information and set the New Repayment Amount to the required amount to pay off the loan over the remaining term. The following are some of the powerful ways to use this report:

  1. To find out how much you can save by increasing your repayments, enter the new repayment amount.
  2. To find out how much you can save by making a one off-payment (eg 10,000), simply edit the balance and enter the new reduced balance. For example, if the balance is currently -100,000, enter a new value of -90,000. The report will then show you how much you will save if you stick to your current repayment amount with the new balance.
  3. If you have an offset account, you can find out exactly how much it is going to save you over the life of your loan. When you open the report, by default the offset balance is not included in the calculations. Simple click the Allowable % radio button, and the Estimated Outstanding Interest will now show you your new total interest bill.

As well as the new repayment amount, you can change any of the following:

  1. The interest rate.
  2. The loan balance.
  3. The option to include the offset balance (if applicable).
  4. The repayment frequency.
  5. The current date.

What is the minimum repayment amount?

The minimum repayment amount is the smallest amount you can enter into the report so that it just covers the interest charges. If you were to enter a repayment amount smaller than the minimum, then the loan would continue to grow indefinitely and you would never pay it off (also referred to as negative amortization). If you try to enter a number smaller than this amount, the report will override your figure with the minimum repayment amount.

Note: You need to set a Loan Term on the Loan Account for the report information to be accurate. If the report displays Original Loan Term (years) 0.0 you will need to close the report, Edit the loan account and enter a value for the Loan Term.

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9. Detailed Payout Plan Report

If you are looking to save thousands in interest payments, then this report is the place to start.

Did you know that if you have a variable rate mortgage your lender will regularly adjust your repayment amount so that you stay on track to paying it off over the full term? They do not want you to pay it off sooner, so even if you get ahead in you repayments, your lender will reduce the amount they want you to repay, to stretch it back out to the full term. They know that if you have a 30 year loan, they can maximise their profit by letting the interest accumulate over 30 years.

The power of this report is that it lets you set the terms of your repayment, and then keeps you on track to achieving your goal. It does not matter if the bank changes the repayment amount, you make a one-off deposit (or withdrawal), interest rates change, etc, this report will continue to adjust your repayment amount to suite your payment terms, not the banks.

Each time you run the report it will show you how long you have left to reach your goal, and the new repayment amount required to achieve it. For example, if you set the target loan term to 20 years, and you are in the second year of repayments, it will show you the required repayment to finish paying the loan off in 18 years.

All you do is enter a Target Loan Term, and the report does the rest. The report also shows you the total interest you will save, by comparing the total remaining interest on the original loan term (for example 30 years) with your new target (for example 20 years).

Note: The repayment amount specified in this report does not include any additional fees your lender charges you. Therefore if you pay a regular account keeping fee you will need to add it to the repayment amount displayed in the report.

Example Results
The following example report highlights that you can save 49,402 on a 100,000 loan, just by paying it off in 20 years instead of 30 years. The report shows this can be achieved by increasing the monthly repayments by approximately 133.24 for the next 18.06 years.

Loan Plan Loan Term Loan End Date Remaining
Loan
Term
Estimated
Repayment
Amount
Estimated
Outstanding
Interest
 
Original Payout Plan 30.00 23/04/2033 28.06 652.37 121,925.94
Target Payout Plan 20.00 26/04/2023 18.06 785.61 72,523.36
Total Impact 133.24 -49,402.58

NOTE: The information was produced for a loan currently in its second year of repayments (that is, 28 years remaining), with monthly repayments.

As well as the target loan term, you can change any of the following:

  1. The interest rate.
  2. The loan balance.
  3. The option to include the offset balance (if applicable).
  4. The repayment frequency.
  5. The current date.

Note: You need to set a Loan Term on the Loan Account for the report information to be accurate. If the report displays Original Loan Term (years) 0.0 you will need to close the report, Edit the loan account and enter a value for the Loan Term.

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10. Interest Rate Rise Report

If you are worried about the impact of future interest rate changes (and interest rate rises in particular) then this report will help.

The report lets you to enter a new interest rate for a loan, allowing you to see how much better or worse off you will be when interest rates change.

The report shows the old and new estimated repayment amounts and the total outstanding interest payment for the remainder of the loan.

You will know in advance how much extra a rate rise will cost you, allowing you to better prepare for it.

As well as the interest rate, you can change any of the following:

  1. The loan balance.
  2. The repayment frequency.
  3. The current date.

Note: You need to set a Loan Term on the Loan Account for the report information to be accurate. If the report displays Original Loan Term (years) 0.0 you will need to close the report, Edit the loan account and enter a value for the Loan Term.

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