FNB homeloan interest help

[phil77]

Hi all,

Can someone please explain to me how interest on a homeloan works. I asked to move my debit order closer to my salary date,
i was advised that FNB won't be able to debit twice in a month(November) so i made a manual payment into the bond account on the debit order date.

December's debit order went through and i was shocked that the balance had increased by about R12k. Does anyone know how interest is calculated?
I asked the bank and they said the manual payment went to the outstanding balance and interest was calculated for 2 months. Is it legal to calculate interest in advance like that?
Can someone with better understanding explain to me how this works.

Thanks

 

[6spdmanual]

@zerocool2009 are you able to help with this one?

 

[zerocool2009]

Howzit. Interest is calculated on the outstanding balance per day.

What you see is pretty normal. The same goes for bonds registrations after the 15th. The 1st debit order will go off only in 45 days, as in the next payment date which you signed for at attorneys.

If you are still unsure. Email FNB at [email protected]

And ask that someome in homeloans show you the calculations (on email). And specifically say “no one needs to call you, you want it in writing”

Think there’s a starting point....

 

[UB40]

FNB is very sneaky, they deduct the money off your account on the 27th and it is nowhere to be seen
Only on the 1st does it reflect that it came off your outstanding home balance.
For those 3 or 4 days in the ether they bought crypto and sold it again
Nah I am just bored and trolling
Good luck with FNB
Wife and I are so glad to be bond free finally

 

[phil77]

Howzit. Interest is calculated on the outstanding balance per day.

What you see is pretty normal. The same goes for bonds registrations after the 15th. The 1st debit order will go off only in 45 days, as in the next payment date which you signed for at attorneys.

If you are still unsure. Email FNB at [email protected]

And ask that someome in homeloans show you the calculations (on email). And specifically say “no one needs to call you, you want it in writing”

Think there’s a starting point....

Thanks for this. Will definitely send an email

 

[zerocool2009]

FNB is very sneaky, they deduct the money off your account on the 27th and it is nowhere to be seen
Only on the 1st does it reflect that it came off your outstanding home balance.
For those 3 or 4 days in the ether they bought crypto and sold it again
Nah I am just bored and trolling
Good luck with FNB
Wife and I are so glad to be bond free finally

If your debit order is scheduled for the 27th... it will go off on the 28th (that morning). I know bonds by heart. Been learning the system since 2003!

You are pretty much crypto “befok”. Rather sleep nice while sars dont audit you.

 

[stevenv]

Hi all,

Can someone please explain to me how interest on a homeloan works. I asked to move my debit order closer to my salary date,
i was advised that FNB won't be able to debit twice in a month(November) so i made a manual payment into the bond account on the debit order date.

December's debit order went through and i was shocked that the balance had increased by about R12k. Does anyone know how interest is calculated?
I asked the bank and they said the manual payment went to the outstanding balance and interest was calculated for 2 months. Is it legal to calculate interest in advance like that?
Can someone with better understanding explain to me how this works.

Thanks

Which balance increased? There is balance and available balance. The "balance" (the capital amount you owe) should be decreasing with each payment: the amount that it decreases by goes up over time as you pay off more capital and therefore the interest portion decreases. If you transfer randomly into the account beyond the fixed debit order, the "available balance" increases. This is the amount you have prepaid into the account and AFAIK this also reduces the interest paid over time.

Also hard to know whether R12k is a lot or a little without context of how much you paid in, the actual outstanding amount and how much you usually pay via debit order.

 

[zerocool2009]

Which balance increased? There is balance and available balance. The "balance" (the capital amount you owe) should be decreasing with each payment: the amount that it decreases by goes up over time as you pay off more capital and therefore the interest portion decreases. If you transfer randomly into the account beyond the fixed debit order, the "available balance" increases. This is the amount you have prepaid into the account and AFAIK this also reduces the interest paid over time.

Also hard to know whether R12k is a lot or a little without context of how much you paid in, the actual outstanding amount and how much you usually pay via debit order.

And on top of that, one can borrow against a debit order after 7 days of clearance.

Prepaid should increase. Balance owing should decrease

 

[phil77]

Which balance increased? There is balance and available balance. The "balance" (the capital amount you owe) should be decreasing with each payment: the amount that it decreases by goes up over time as you pay off more capital and therefore the interest portion decreases. If you transfer randomly into the account beyond the fixed debit order, the "available balance" increases. This is the amount you have prepaid into the account and AFAIK this also reduces the interest paid over time.

Also hard to know whether R12k is a lot or a little without context of how much you paid in, the actual outstanding amount and how much you usually pay via debit order.

I usually pay R28600 via debit order ,the interest for the 1st of November was R23598. Next interest shown on statement is on the 29 December R43796.
Available R0,
Balance R2376559 I queried why the Available is 0 and they told me that it's because my flexi account was suspended until i show proof of Insurance.

 

[stevenv]

I usually pay R28600 via debit order ,the interest for the 1st of November was R23598. Next interest shown on statement is on the 29 December R43796.
Available R0,
Balance R2376559 I queried why the Available is 0 and they told me that it's because my flexi account was suspended until i show proof of Insurance.

Wow, that is an insane bump in the interest in one month! They definitely need to give you an explanation for that calculation.

Personally I don't actually understand how my bank runs my bond account because somehow my available balance is increasing beyond the amount actually prepaid i.e. as if I'm earning interest on the prepaid amount in a savings account. Pulled all the prepaid funds temporarily on 4 December to see what would happen to the actual interest amount. The available was R0 for all of December and lo and behold, start of January the debit order goes up by R280 and the available increases by almost R500

 

[zerocool2009]

Wow, that is an insane bump in the interest in one month! They definitely need to give you an explanation for that calculation.

Personally I don't actually understand how my bank runs my bond account because somehow my available balance is increasing beyond the amount actually prepaid i.e. as if I'm earning interest on the prepaid amount in a savings account. Pulled all the prepaid funds temporarily on 4 December to see what would happen to the actual interest amount. The available was R0 for all of December and lo and behold, start of January the debit order goes up by R280 and the available increases by almost R500

Do yourself a favor. Take time stamps before your debit order, and on the debit order date, and 7 days after the debit order

You can borrow against the debit order again (as a %), but not full amount.

I am paying bonds off in 24 months. I spend last month R1 000 000. And my debit order increased with R2000 only. The bank wont con anyone. If you dont get how calculations work, drop the bank an email to explain.

 

[Speedster]

Wow, that is an insane bump in the interest in one month! They definitely need to give you an explanation for that calculation.

Personally I don't actually understand how my bank runs my bond account because somehow my available balance is increasing beyond the amount actually prepaid i.e. as if I'm earning interest on the prepaid amount in a savings account. Pulled all the prepaid funds temporarily on 4 December to see what would happen to the actual interest amount. The available was R0 for all of December and lo and behold, start of January the debit order goes up by R280 and the available increases by almost R500

That interest amount is for two months.