See what your payment becomes at renewal

Wealthru already tells you when your term matures. This tells you how much the payment becomes if you renew at a higher rate. Everything here is an estimate for planning, not financial advice.

Where to find it

Open a property, go to Mortgage, and click What if it renews higher? on the mortgage you want to model. It starts collapsed, because it is a projection sitting on a record of real numbers.

What it shows

Three rows, each labelled with the rate it assumes:

• your rate today, what the payment becomes at the rate already on your record
• +1% and +2%, the same balance at one and two points higher

Each row shows the new payment, and how much more that is per payment and per year. The yearly figure is usually the one that lands.

Above the rows it says what it is working from: the balance that will be left on your renewal date, and the years of amortization that remain.

We do not know what rates will be

The rows are offsets on your own recorded rate, not a forecast. "+2%" means two points above the rate on this mortgage. It is arithmetic on your own loan and nothing more. Wealthru does not track posted rates and does not claim to know where they are going. If we published a market rate here it would be wrong the week after we wrote it, and wrong with the authority of a printed number.

If you have a real quote

Type it into Rate you were quoted (%) and press Model it. You get that scenario on its own line.

The rate you type is capped at 25%. If you type something above the cap the figure comes back at the cap, and the line says which rate it actually used, so a number on screen always names its own assumption. The three rows above it are not capped, because they are worked out from the rate on your own record rather than from something typed in.

How the payment is worked out

At renewal your outstanding balance rolls into a new term, spread over the amortization you have left rather than a fresh 25 years. That shrinking amortization is why the payment rises faster than the rate alone suggests.

If you pay accelerated bi-weekly, the figures follow that schedule: an accelerated payment is half your monthly payment made 26 times a year, so you make the equivalent of 13 monthly payments and clear the loan sooner.

When it shows no scenario

You get a sentence saying which, never a made-up payment:

• This mortgage is discharged. It is paid off, so there is no term left to renew.
• The renewal date has already passed. The record has not caught up with the loan. Edit the mortgage, set the new term's dates, and the next renewal will model.
• The amortization ends before this term does. The loan finishes before the term matures, so there is nothing left to re-amortize.

Good to know

• Every figure comes from what you recorded. Nothing is invented.
• The payment shown at your current rate is recalculated from the renewal balance, so it can differ by a little from the payment on your statement. That is rounding and any extra you have paid down, not an error.
• A renewal at +2% is often enough to push a property's debt-service coverage ratio below what a lender looks for. Worth checking both together before you renew.
• This is a planning estimate. For a decision on a renewal or a switch, talk to your lender or a mortgage broker.