Mortgage Prepayment Calculators
“Using Prepayment Calculators As A First Step in Determining Prepayment Costs”
One of the more confusing aspects of any mortgage decision is the accurate calculation of a potential prepayment penalty now or in the future.
If you’re looking to refinance for a lower rate and/or to gain some additional funds, an exact prepayment calculation can be obtained from your mortgage provider at any time.
But if you’re in need of a new mortgage, it can be difficult to determine what the future prepayment penalty calculation will be for any given situation.
By law, mortgage lenders must clearly outline the detailed calculation related to prepayment penalties associated to any of their mortgage products.
That being said, lending sources have never made this an easy to understand process even though all the information required is technically “all there” for you to digest.
And having to crunch out the math on perhaps a number of future prepayment scenarios you may have in mind can not only be time consuming, but also easy to do incorrectly.
So with more and more complaints about the complexity of the math and the understanding of each lender’s criteria, many of the main mortgage sources in Canada now provide mortgage prepayment calculators for anyone to use free of charge.
Mortgage Calculators Provide Interesting Results
The article itself goes on to explain that after inputting similar scenarios into all the different calculators, that no two penalties ended up being the same.
This would clearly speak to the need for this type of online tool and judging by the ease of use and non use of some of the calculators, the tools need to also continually be improving.
Now, whether you’re doing some online research to refinance, you can at least get an initial feel as to what the prepayment penalty could be in a mortgage you are leaving as well as how the prepayment penalty would work for a new mortgage for different scenarios in the future.
Statistics clearly show us that consumers and business owners are going online more and more for mortgage related information and for this particular type of inquiry, these tools are a step in the right direction.
That being said, they also point out that there are vast differences in prepayment penalty calculations, and while the calculators mentioned in the article provide you with some data to work with, they are clearly unofficial with respect to any exact prepayment penalty you may incur now or in the future from any of the named lenders.
so while these resources are good for some online research, they don’t replace the need to be working with an experienced mortgage broker who can work through all the calculations and comparisons with you.
If you’d like to discuss prepayment penalties for a mortgage you now have, or for a future mortgage, I suggest that you give me a call and we’ll make sure you get all your questions answered right away.
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About the Author Joe Walsh
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel