Mortgage Renewal: Compare Interest Rates

Avatar of u/WorkBee
u/WorkBee · Joined Oct 2024

At renewal, you should review the options from your current lender and other lenders. While there are fees when you switch, the interest saving can be worth it.

Last update Oct 2024
  • Scenario 1: Option 1: Total Interest Paid
  • Scenario 2: Option 2: Total Interest Paid
  • Which One Is Higher (%)

This chart shows accumulated interest. Essentially we want to pay less interest to the bank (principal is our own money). The lower one is the better one for sure, but we also look at the dollar difference: does it cover the switching cost?

# Years from Now

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A =

B =
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Time Value Assumptions

Heads Up!

If you're using Cost Basis (cb) for calculating capital gains:

Please be aware that very few countries currently use inflation-indexed cost basis. Double-check your local tax rules before publishing.

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How is Cash Value calculated?

Calculate the sum of interest payments of Mortgage Option 1.

Calculations

(Expressions are evaluated at every year.)

C̃ =
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