Coming Soon: Loan Accounts! 🏦
Hello, fellow YNABers!
I am very excited to announce that Loan Accounts are rolling out soon! Like many other prior releases, we’re using a phased approach.
Loan accounts are uniquely designed to help you track your loans and budget for your loan payments. If you have student loans, personal loans, a mortgage, medical debt, or another type of loan, YNAB Loan accounts are here to help you budget for your payments and pay. it. down!
There’s some pretty slick new stuff built into this feature, including (but certainly not limited to) a debt payoff calculator, which you will mess around with for longer than you anticipate - a girl can dream about paying her mortgage off in five years, can’t she?!
You’ll also be able to migrate any existing tracking account over, without losing any of your account history 🙌🏻
Take the new loan accounts for a spin and let us know how it goes! And as always, use this form to share any feedback you have directly with our Product team. Happy debt-crushing!
New Blog Post: Slay Your Loans With YNAB’s Loan Planner
OK, not a big fan of the mortgage loan account for several reasons that I won't go into here. However, I just tried it and I believe that since I am in Canada, this is causing a problem.
There needs to be an ability to set a term. In Canada, term and amortization are separate things. I can have a 25 year amortization but the term can be anything from 6 months to 10 years. At the end of the term, there is a balance remaining that needs to be refinanced.
Secondly, as someone has already stated, the way that Canadian mortgages are compounded is different than US mortgages. With the exception of variable rate mortgages, all mortgages are compounded semi-annually, by law. Here is a link to a page that goes into annoyingly mathematical formulations which are probably useful to programmers. http://www.yorku.ca/amarshal/mortgage.htm
I'm really excited to see this feature. My wife and I actually used this approach to pay off our 18 year house mortgage in 7 years! We used a mortgage calculator app to do the various loan planning scenarios to see where we could get the biggest impact, but now that feature is right within YNAB!
One thing though, in my country banks don't make it easy to make extra payments. There are often limits to the number and value of extra payments you can make in a year. My mortgage banker was one of the better ones, but I still had to go in physically once per year to make that lump sum payment to accelerate the mortgage. So I can budget the extra funds, but my regular payments should still be the planned amounts. Once a year, I can take the extra funds set aside to accelerate my mortgage and make a payment.
Would this scenario throw off YNAB's implementation?
I'm trying to decide if YNAB, whose budget page is essentially a spreadsheet with pretty UI, should have a loan feature that is worse than a spreadsheet.
I'll give you that any interest calculation is more complicated than the simple addition/subtraction of the budget page.
However, I also created a spreadsheet that was usually not even a penny off (there was one February that was 2¢ off... but I fixed for the subsequent Februarys...) for my student loans.
I can guarantee that your loan account would not be correct for me. Not only did it compound daily, but it had idiosyncratic rules about how extra payments were applied. These weren't based on math, but on control (I mean, logic statements... I figured they assumed anyone getting a college degree should be able to understand the terms, math, and logic used. I also figure they assumed most people wouldn't bother to look, so the loan servicer could twist the game to their advantage... Obviously, they were making money on the extra complexity).
I would see no benefit to using the loan feature in that case, and it seems like trying to switch my mortgage will simply not be worth the effort. What's the benefit? Why have a workaround for seeing the account register?
But mainly, is there anyone who wants to convince me that I should try it for my mortgage? I've got a list of other things to do at the moment, though one of them is to figure out if a self-escrow idea is feasible. So, I'll be looking into that part of YNAB anyways.
I would really enjoy this feature if there was an option of biweekly payments vs only the monthly payment. We set up our car loan before diving into YNAB completely 2 years ago before YNAB and did not want to fall into the "are we going to have enough at that time of the month" problem. But since YNAB, we're super much better with money. --> when this option is added, I'll be switching our right over, including our bi-weekly mortgage payment.
I did use the loan feature for 2 days but giving up the balance view of the actual account gave me too much anxiety.
Can you please tell me how to turn off the blue dots advertising the new loan feature in all my tracking accounts? I've explored it, I've read this thread and the other documentation, and I've determined that it doesn't meet my needs. Now I want to tell YNAB that I'm not going to use it and stop looking at the dots that are making me think I have transactions to import. Thank you.
I like the intent with this feature, ie, to see impact of extra payments to reduce interest/time over life of loan but I feel there are a few bugs to be worked out. I just made an extra principle-only payment through my lender; when recording that in the new activity feature, YNAB estimates a P&I split...it doesn't give me the option for "principle only". Keep up the good work and thank you for continuing to develop.
Super stoked with this new feature, thanks a ton YNAB team.
An issue I've run across for myself: previously I tracked extra payments as a separate category so I could keep track of how much extra I've paid in the history of the loan. If I begin adding extra money into the main payment category, is there a way to track extra payments separately from mandatory payments? And is there a way to retain the extra payment category's history in this new loan account?
Hi folks - is there any way to change the linked Budget Category after creating the account? I've not found a way through the UI except by deleting and recreating the Loan account.
The reason this came up is I made the mistake of selecting an existing budget category, when in reality I should have just created a separate category for the loan. YNAB can only link one budget category per loan, which I only realized when trying to add my second loan account of a similar type.
BTW - really excited for this feature, been waiting for this one for a while. Thanks YNAB!
I've already submitted this via the feedback form, but might be worthy of discussion.
My Auto Loan is paid weekly, not monthly, I did this originally because it saves on interest payments over the term. It would be good if YNAB supported this.
I have an investment properly loan which I pay only the interest and zero principle. Not sure how this will play out with the new Loan Categories, I will see. It would be nice if you could toggle whether payments were interest only or also contributing to principle.
After trying this for a while, I've given up and gone back to my old account. While the new functionality is great as a supplement to the ledger, I don't see why it has to replace and entirely obscure the ledger. In my opinion, we've lost a lot more than we've gained.
I mocked up how I would like to see it look as a ledger with like a side bar widget. It would be great to have the auto-calculated interest show up as a linked recurring transaction, and be able to do the "what if" insights and maybe have those generate transactions for you. But give us the ledger back, let us go back and edit/correct the interest, give us running balances, give us visibility into our history.
I'll provide this feedback officially too.
1. Include options for choosing:
- How interest is calculated, e.g. monthly, daily average, daily.
- How often and when interest is applied, e.g. monthly, twice monthly, every x weeks (regardless of when payments are actually made).
2. Estimated interest should be added as uncleared transactions, which users can manually adjust before confirming them. Even if YNAB doesn't get it perfect to the penny (due to numerous calculation variations and rounding methods), giving us the option to edit directly for correctness compensates for that. Balance adjustments are just a workaround and do not reflect reality.
3. Is this a bug? Modifying the interest rate changes the interest amount applied in the previous month. Transactions are historical facts, so they should not be continuously linked to variables for dynamic changes.
4. Allow offsetting balances. In practice, this offset amount would effectively be the balance of another account in YNAB, which can be linked to the loan/mortgage account for the purposes of calculating interest. Once estimated interest is added as an uncleared transaction, the figure is no longer linked to the offset balance; this prevents any retroactive changes in the linked account from affecting past interest.
5. Provide an explicit option for interest-only mortgages. The current workaround involves setting the minimum payment to 0.00 and YNAB calculates the minimum instead (just the interest).
6. For older tracking loans that have been converted, include the starting date of the loan, the original principal amount, and import all transactions and memos from the tracking account. Ledgers and running balances are very useful to many! Interest/Fees/Charges (as a legacy sum for stats) would be: Current Balance + Payments - Principal.
7. Allow multiple spending categories per loan. Users have their own budget categories and they should have a choice not to lump all payments to one account through one spending category.
8. Nice to have: A payment type/flag that prevents payments on weekends; any payment date that falls on a weekend is pushed back to the following Monday (e.g. Direct Debits in the UK).
echoing Salmon Mermaid
Definitely this: "2. Estimated interest should be added as uncleared transactions, which users can manually adjust before confirming them. Even if YNAB doesn't get it perfect to the penny (due to numerous calculation variations and rounding methods), giving us the option to edit directly for correctness compensates for that. Balance adjustments are just a workaround and do not reflect reality."
I immediately converted my auto loan from a tracking account to a loan and just had my first payment since the conversion.
If I can edit the Interest payment rather than inserting an adjustment, I'm converting back to a tracking account and doing it my old manual way.
It has to be accurate or it's useless to me.
Sucks cuz it is a neat new feature.
Cadet Blue Wrench said:
I would add another bullet under point 1 for specifying if the loan has a balloon payment / final lump sum / etc.
That is very important for Canadian mortgages which (as I explained somewhere earlier in this thread) are amortized over 25 years but are arranged on a 1-5 year term. Essentially that is a balloon payment. We then start a new mortgage for the balance with the remaining amortization and a new term.
I really have to say this new "loan" account type is stupid. They ask you to separate the escrow payments from the principle and interest (great!), but then don't track that balance at all... I reached out to support and they said, "yeah, don't use the loan account if you want to track escrow"... Then why tell me to track it!
I get that's for the "pay off" early form. But I can do this with any calculator on the web, Excel, or my trusty HP 12C.
Now that I want to undo the loan account, I can't without jumping through tons of loops and workarounds... I can't delete the stupid loan account now cause it has transactions I can't edit. And the annoying notification that tells me to "upgrade" to the new loan account type won't go away.
With the increased price, what exactly are we paying for?
It's a good idea... Just poorly executed. It's right back to the "do things our way or get lost" YNAB mantra...
This is a really good feature and I hope more 'planning' type features come in future to YNAB.
However, it has been shipped too soon. Salmon Mermaid has captured it correctly that there needs to be at a minimum the ability to set the mortgage particulars like payment frequency and the way interest is calculated. If this was not possible for the first release, then at least the ability to edit the interest values would've been better (and should be included).
From the sounds of things in this forum, even folks in the US don't exclusively have a single style payment/interest calculation method so I don't think YNAB can use the excuse that this was US centric from the start.
AHHH! My God - I only needed to update my accounts last night, but I got sucked into this loan account conversion nightmare. I tried last night, and more today, to try to make it work, but it's now a god-awful mess. It's going to take my entire evening tonight to sort out my transactions and put them all back the way they were. I wish I could reset back to this time yesterday before I began all this mess.
The loan account fails to make room for anything at all unusual. For instance, I purchased my current home this past June, and the closing day in June for my previous mortgage account has (had) all these in-and-out transfers to account for the various expenses involved in the transaction where I sold my previous home and bought this one. Ayyy-yay-YAY! I have hanging transfers and uncategorized expenses all over the place. I can no longer use the mortgage category to catch all the escrow money along with the mortgage payment - that all has to have its OWN category now, if I want to track my taxes and insurance payments. Just what I need - yet ANOTHER category to complicate my budget.
I TRIED to like it - really. I tried. But I've lost an entire day to it, PLUS I still have a mess to clean up. Sorry, YNAB, I hate it - LOATHE IT. Not going to use it.