﻿ Mortgage Acceleration

Mortgage Acceleration

# Example

A client is making monthly payments of \$741 on a mortgage of \$100,000 at 7.5%. How much time would the term be reduced if they added one additional payment per year?

Data Entry

## Step 1: Solve the current term.

Use the following values for the prompts:

## Value

Calculation Type

Loan

Calculate

Number of Years

Loan Value

100,000

Interest Rate

7.5

Type of Payment

Level Payments

Payments per Year

12

Payment Amount

741

Annual Increase in Payment

End of Period

Balloon Payment

0

## Result

The client currently has 23.4166 years left to pay.

## Step 2: Increase the number of payments.

Change the # of Payments/Year to 13

## Result

The # of Years calculates to be 19.3077, a reduction of just over 4 years.

 Note: This is only an estimation of the effects of an additional payment. Because the payments by TRAK are calculated by equally spreading out each payment throughout the year, and this may not be what actually occurs, the actual results may vary.