Ideas for the Mambu Banking Engine

[Offset Loan] Make the interest saved due to the offset deposit account balance available for redraw

What?

On an Offset Loan account with an Offset Deposit Account the interest is calculated as the Principal Balance - Offset Deposit Account Balance. If the Offset Deposit Account Balance for a given period is >0, then the interest calculated is going to be lower than the expected interest for the period. The difference between expected and actual interest should be available to be Redrawn from the redraw balance.

Here is a link to example calculations.

Why?

UBank and other mortgage lenders make the interest saved due to the redraw balance available for redraw.

The change in calculation is due to the implementation of LNN-42, with which the loan account itself will never directly collect the repayment from the Offset Deposit Account. Rather, LNN-42 will collect the repayment from the Offset Deposit Account and deposit it into the Redraw Balance of the Loan, from which the loan will always collect the instalment amount.

Note

This idea relates to LNN-50.

  • Sascha Dannroth
  • Sep 23 2019
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