Prepayment timing comparison

How this calculation works

Method and assumptions

Now: amortize a replacement loan immediately. Later: service existing debt through the wait, refinance its remaining balance, and amortize through the same end month. Compare total interest plus entered premiums, fees and waiting costs; report balances separately.

Worked example

For the default $3 million existing loan at 5% with 300 amortization months remaining, waiting 12 months leaves $2,938,142.79 to refinance. Both scenarios use a 6% replacement loan with 360-month amortization and a common 36-month analysis end. Using entered premiums of $100,000 now or $40,000 later and $40,000 new fees in either case, nominal financing cost is $670,036.67 now versus $576,983.97 later: $93,052.70 less when waiting under these assumptions.

Before using the result

Know the boundaries

• Educational scenario, not a quote, commitment, approval, appraisal or payoff statement.
• Defaults and thresholds are editable illustrations; the executed documents and lender underwriting control.
• No yield-maintenance/defeasance pricing, discounting or rate forecast. New fees are paid from cash, not capitalized. New debt is assumed to mature after the comparison horizon.