How to check your payout figure before settlement
The payout figure arrives as a single number and most people pay it. It is not a single number — it is a construction, and constructions have errors. A discrepancy found before settlement is a negotiating point. Found afterwards, it is your problem.
How a private lender builds the figure
The formula is consistent even where the numbers are not:
Principal + full-term interest charged − interest already paid in advance + itemised legal costs + disbursements = payout.
A worked example: principal $450,000; interest at 20% charged $45,000; less $22,500 already paid in advance; plus legal costs of seven items at $660 including GST each ($5,082); plus disbursements of $1,792.53 — a total payout of $479,374.53.
Note the shape of that. The legal costs are seven separate line items, not a round fee. Budget them separately rather than assuming they are folded into a fixed discharge charge.
The five things that make a payout figure wrong
1. Interest charged for a period you did not use
Where a facility has a minimum term, interest is payable for that period whether or not the loan runs that long. That is legitimate. What is not always right is which period was applied — full term, minimum term, or elapsed. Ask which basis was used and check it against your signed documents rather than the term sheet.
2. A redraw treated as a repayment, or the reverse
This one is expensive. On one facility an extension balance was calculated at $272,000 on the assumption that $108,000 had been permanently repaid. The lender’s own records showed that $108,000 had been redrawn back to the borrower, so the true balance remained the full $380,000.
A redraw is not a permanent repayment. Reconcile the full redraw and repayment history against the lender’s ledger before you calculate anything.
3. A refund condition with a deadline you did not notice
Where the payout includes a refund of unused prepaid interest, that refund typically only holds if settlement happens by a specific date. Slip past it and the refund disappears — which means the figure you were quoted is no longer the figure you owe.
Lock the settlement inside the stated window, and if it is going to slip, ask for the figure to be reissued before you rely on it.
4. Interest calculated against the wrong number of weeks
On caveat and short-term facilities, check the interest against the actual number of weeks the security was on title. A missed week is an easy error to make and an awkward one to bill afterwards — one case was a $2,000 shortfall caught and invoiced after the fact.
5. A fee that changed since the funding table was built
This is the one that causes panic rather than loss. On one file the submission-stage table assumed a risk fee of $25,987.50; the amount actually charged was roughly $11,000–$12,000. Combined with an administrative error in the net advance figure uploaded to the settlement platform, it created the appearance of a $65,000 gap days before settlement.
Re-run the whole settlement funding table whenever any lender fee comes in materially different from the modelled figure. A fee change alone can look like tens of thousands missing.
Reconcile the sources and uses, line by line
The same discipline applies to a funding table on the way in, not just a payout on the way out. Do not take a lender’s figures at face value on a complex deal — rebuild them independently from the same inputs and keep a competing term sheet on hand as leverage.
Two examples of what that catches:
- A tranche total reconciling to $3,085,250 against a funder’s implied $3,215,200 — a $129,950 shortfall, found and fixed pre-settlement.
- A net-at-settlement figure of $2.155m on an independent model against $2.080m in the funder’s table.
Both were genuine balancing errors. Both were correctable before settlement and would have been the borrower’s problem afterwards.
Timing
- Lodge the discharge request early. Standard turnaround is around five business days from the request being actioned. Leaving it late jeopardises an already-booked settlement date.
- Payout figures have an age limit. Settlement agents commonly require a figure no older than ten days, supplied the day before settlement.
- Chase the outgoing party’s solicitor to upload their figures. Settlement and surplus figures cannot be finalised until they accept the workspace invitation and upload — this step, not the incoming lender, is often the actual bottleneck.
The audit, in order
- Ask for the figure itemised, not as a total.
- Confirm which interest basis was applied, and check it against the signed documents.
- Reconcile every redraw and repayment against the lender’s ledger.
- Find the refund condition and its deadline.
- Check the interest period against the actual weeks on title.
- Rebuild the whole thing independently and compare.
- Where there is a gap you cannot explain, raise it in writing before settlement — not after.
Most discrepancies turn out to be a treatment difference rather than an error. But you only find out which by asking, and the cost of asking is one email.
General information only. It is not credit assistance, financial product advice, or an offer of finance, and it does not take account of your objectives, financial situation or needs. The lender’s own itemised statement governs. Figures are de-identified observations over 2024–2026.