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Mortgage Isolator/Strategy Tool  

This Mortgage Strategy Tool will help you calculate the most effective ways for to pay off your mortgage quicker. First complete 3 of the first 4 items below.  Then by editing items 5, 6, or 7 you will be able to determine the net impact to your mortgage by using different payment frequencies, extra payment(s), increased payment(s), or lump-sum payment(s).

For example, Judith has a $176,000 mortgage with a 25 year Amortization, a monthly payment frequency and a 5.4% Interest Rate, ARP. She would like to see what would happen to the Amortization period if she put in a lump sum payment of $5000 each year on top of the mortgage payments.

She enters 176000 for the mortgage amount (no commas or dollar signs), and 5.4 for the interest rate, 25 for the amortization (25 years), and selects monthly as the payment frequency. She clicks on the "compute" beside the Initial Mortgage Payment line. This shows she has a Mortgage Payment of $1,064.07 per month.

Next, she enters 5000 as the Lump Sum Payment, and hits Results. She is very pleased with what the reduced term and interest savings amounts to.

Calculate the effects of prepaying by completing the boxes below*

1. Mortgage Amount ($)
2. Interest Rate (%)
3. Initial Amortization Period Year(s) Month(s)
4. Initial Mortgage Payment ($)
5. Payment Frequency Accelerated:
6. Lump Sum Payment (Annually in $) Period: Year(s)
7. Mortgage Payment Increase (Annually) Period: Year(s)

*Note that if you fill in any three of the four first four values the calculator will automatically
calculate the fourth when you press the compute button beside that value.

Results

By making prepayments, the amount of time it will take to pay off your mortgage has been reduced to Year(s) and Month(s).
This also represents a savings of $ in interest.

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