How do I calculate my prepayment savings?
Q: My mortgage balance is $37,500, the interest rate is 5.99 percent, the maturity date 2019. I have been making periodic principle payments. Do you have a calculator that will provide information on how to pay off my mortgage given my current balance and making principle payments?
A: Most of HSH.com's prepayment calculators allow for regular additional payments of principal and will tell you when the loan will end and what your savings will be. Specifically, HSH.com’s It's My Term Prepayment Calculator allows you to enter the date when you want your loan to end and will tell you how much you'll need to pay to make that happen.
If you are making occasional, irregular prepayments of principal, we do have a calculator you can use, but you will need to download it and install it locally on your windows-based computer. You should visit www.hsh.com/hbcalc.html and download version 2.2.05 of HSH.com's Homebuyer's Calculator Suite.
Once you have downloaded and installed it, you can run your loan's amortization using the dropdown for "Amortization"; put in the basic loan parameters of start date, rate and term, then calculate payments.
Next, add your irregular prepayments one at a time on the dates you made them. Click "add prepayments," then using the "single payment" selection, select the payment number where you included extra cash and the amount, then click "apply extra." Repeat as needed for all the prepayments you made, and the updated results will appear at the bottom.
A 25-year expert observer of the mortgage and consumer debt markets, Keith Gumbinger has been cited in thousands of articles covering a wide range of consumer finance and economic topics in outlets ranging from the Wall Street Journal to the Bottom Line newsletters. He has been a featured guest on national broadcasts for CNN, CNBC, ABC, CBS and NBC television networks and has been heard on NPR and other national and local radio programs. Keith is the primary researcher and writer for HSH.com's MarketTrends newsletter and has authored or co-authored a number of consumer guides on mortgages, home equity, refinancing and more.