Interest Rate Differentials (IRD)
Often a client needs an “idea” of how much their existing mortgage penalty might be before he decides to refinance or do an “early switch” with pre-payment penalty.
If the penalty is based on a rate differential, here is a BASIC calculation to figure out a close amount…..
Based on a:
$200,000 with 3 years remaining on a 5 year term of 5.70%.. ...