Trail Runoff Calculator
This trail runoff calculator projects how declining eligible balances affect trail income. Compare no new lending with your monthly settlements, and see the lending needed to maintain your opening income.
Book and lending assumptions
The balance that earns trail after any offset exclusions. Use the same eligibility basis for new settlements.
A constant annual rate applied to every eligible balance. Enter your own rate.
The yearly reduction without new lending, spread through equal monthly compounding.
Added after each month's runoff. The same amount is added every month.
Results
Check the marked input to calculate an estimate.
Projected book balance
$129,318,084.63
At the horizon, with your settlementsMonthly trail at the horizon
$16,164.76
Closing eligible balance at your rateAnnual trail run-rate
$193,977.13
Horizon monthly trail multiplied by 12Monthly settlements to maintain income
$874,161.10
Target: the opening book's monthly trailThe selected income target is $12,500.00 a month from your opening book. Replacing $874,161.10 of eligible balance each month keeps that book constant.
Book balance over time
Compare inaction with your settlements. The table also shows lending that replaces runoff.
After 5 years, no new lending leaves $59,049,000.00. Your settlements leave $129,318,084.63.
Trail and balances by year
Monthly trail and annual run-rate use the year-end balance. Year receipts add the twelve projected monthly amounts. CSV includes every month.
| Year / scenario | Closing balance | Monthly trail | Annual run-rate | Year receipts |
|---|---|---|---|---|
| 1 / No new lending | $90,000,000.00 | $11,250.00 | $135,000.00 | $141,744.24 |
| 1 / Replace runoff | $100,000,000.00 | $12,500.00 | $150,000.00 | $150,000.00 |
| 1 / Your settlements | $107,159,308.60 | $13,394.91 | $160,738.96 | $155,910.55 |
| 2 / No new lending | $81,000,000.00 | $10,125.00 | $121,500.00 | $127,569.81 |
| 2 / Replace runoff | $100,000,000.00 | $12,500.00 | $150,000.00 | $150,000.00 |
| 2 / Your settlements | $113,602,686.33 | $14,200.34 | $170,404.03 | $166,058.46 |
| 3 / No new lending | $72,900,000.00 | $9,112.50 | $109,350.00 | $114,812.83 |
| 3 / Replace runoff | $100,000,000.00 | $12,500.00 | $150,000.00 | $150,000.00 |
| 3 / Your settlements | $119,401,726.30 | $14,925.22 | $179,102.59 | $175,191.58 |
| 4 / No new lending | $65,610,000.00 | $8,201.25 | $98,415.00 | $103,331.55 |
| 4 / Replace runoff | $100,000,000.00 | $12,500.00 | $150,000.00 | $150,000.00 |
| 4 / Your settlements | $124,620,862.26 | $15,577.61 | $186,931.29 | $183,411.38 |
| 5 / No new lending | $59,049,000.00 | $7,381.12 | $88,573.50 | $92,998.39 |
| 5 / Replace runoff | $100,000,000.00 | $12,500.00 | $150,000.00 | $150,000.00 |
| 5 / Your settlements | $129,318,084.63 | $16,164.76 | $193,977.13 | $190,809.21 |
All starting figures are hypothetical assumptions. The income target changes with your opening balance and trail rate. At a 0% trail rate, $0 of settlements maintains $0 income, even when balances decline.
Runoff applies before month-end settlements. Monthly trail uses that closing balance, including the new settlements. This is a monthly projection without payment delays or daily averaging.
The same rate and eligibility rules apply to the whole book. Figures exclude GST, aggregator deductions and operating costs. Calculations retain precision between months and display money to cents. PDF opens your browser's print dialog.
From Balance Runoff to Lost Trail
Balance runoff reduces the eligible loan balance that earns trail. At a constant trail rate, a 10% fall in that balance produces a 10% fall in the monthly trail run-rate. New eligible settlements add balance back into the book.
The calculator converts your annual runoff assumption into an equivalent monthly rate. Monthly runoff equals 1 minus the twelfth root of 1 minus annual runoff, with percentages expressed as decimals. Each month, the existing balance loses that share before new settlements are added.
Monthly trail equals the closing eligible balance multiplied by your annual trail rate, divided by 12. The annual run-rate is twelve times that monthly figure. Year receipts instead add the twelve monthly projections, so they reflect the changing balance throughout the year.
For a small hypothetical example, start with $100 of eligible balance, 1% monthly runoff and $10 of monthly settlements. Month one closes at $109: $100 less $1, plus $10. Month two closes at $117.91: $109 less $1.09, plus $10.
That 1% monthly runoff is about 11.36% compounded annual runoff. At a hypothetical 12% annual trail rate, month one's trail is $1.09 and month two's is $1.18 after display rounding. The calculation keeps unrounded values between months.
Comparing Growth With Inaction
The three scenarios start with the same eligible book, trail rate and runoff assumption. No new lending lets the book decline. Replacement lending adds exactly the monthly runoff from the opening balance, keeping that balance constant. Your settlements can produce growth or decline.
In the hypothetical starting example, a $100 million book at 0.15% annual trail earns an opening monthly run-rate of $12,500. With 10% annual runoff and no new lending, the balance falls to $90 million after one year. Its monthly trail falls to $11,250.
The equivalent monthly runoff is about 0.8742%. Replacing $874,161.10 of eligible balance each month holds the opening book and its $12,500 monthly income. Adding the example $1.5 million monthly settlements instead leaves $107,159,308.60 after one year, with monthly trail of $13,394.91.
The selected income target is the opening book's monthly trail, calculated from the balance and rate you enter. Changing either input changes the target. With a zero trail rate, the income target is $0 and no new lending is needed to maintain it. The replacement scenario still shows the lending needed to preserve the balance.
The starting runoff and trail rate are illustrative assumptions, not market benchmarks. Enter assumptions that fit the book you want to model. With positive runoff, monthly settlements above the replacement amount grow the book from its opening level. Lower settlements leave it below that level.
Interpreting a Runoff Forecast
A constant runoff percentage smooths losses across every month. Actual repayments and discharges occur on individual loans, so the same total book balance can produce different trail receipts.
Principal repayments reduce the amount owing, while a full discharge removes the remaining loan balance. Offset deposits are different: they can reduce the balance used to calculate commission while the loan remains outstanding. The MFAA's remuneration explanation describes monthly trail on outstanding balances excluding offset funds, subject to the loan's payment status.
Moneysmart's offset guide explains that offset money stays in a separate account and reduces the balance charged interest. An offset withdrawal can reverse that effect. Treat your opening figure as the balance eligible for trail under your commission terms, and avoid deducting offsets twice.
This model uses one trail rate across existing and new loans. It assumes new settlements earn a full month's closing-balance trail immediately. Actual payment timing, daily averaging or changes in lender eligibility can move receipts away from this projection.
Use the year receipts column when planning income over a year. Use the monthly figure when comparing the book's income at a particular year end. Revisit the runoff assumption when your commission reports show a sustained change in eligible balances.