|
OLD LOAN |
NEW LOAN |
| Initial loan amount: |
$ 2,000,000 |
$ 2,200,000 |
| Current loan balance: |
1,925,000 |
NA |
|
|
|
| Initial loan term: |
10 years |
l0 years |
| Remaining loan term: |
6 years |
10 years |
|
|
|
| Interest rate: |
10.75% |
8.50% |
| Amortization schedule: |
25 years |
30 years |
| Monthly payment: |
$19,242 |
$ 16,916 |
|
|
|
| Portion of monthly payment applied to Interest
(average): |
$17,105 |
$15,719 |
|
|
|
| Monthly tax savings @ 40%: |
(6,842) |
(6,287) |
|
|
|
| Monthly after-tax Interest cost |
$10,263 |
$9,432 |
| Monthly after-tax Interest savings: |
|
$831 |
|
|
xl2 |
|
|
|
| Annual after-tax interest savings: |
|
9,972(a) |
| New money obtained: |
|
$200,000 |
| Less refinancing costs: |
|
(65,000) |
| Net new money: |
|
$135,000 |
|
|
|
| Annual Interest Income on new money @ 3%: |
|
$4050 |
| Lets Income taxes @ 4O% |
|
(1,620) |
| Net annual Interest income: |
|
$ 2,430(b) |
|
|
|
| TOTAL ANNUAL BENEFIT FROM NEW LOAN (a+b=c): |
|
$12,402(c) |
|
|
|
| Time to "breakeven" for new loan if old
loan has: |
|
|
| 1% prepayment penalty: |
|
19 months |
| 2% prepayment penalty: |
|
39 months |
| 3% prepayment penalty: |
|
58 months |
|
