How to model early loan or mortgage payoff?
Published Mar 12, 2024
To model making extra loan payments – in addition to the normal monthly payments you have defined in the debt form or real asset form – you can use cash-flow priorities.
When you add a new cash-flow priority, under Existing Items you should see an Extra Payments option for each kind of debt.
You can choose to model the extra payments as a specific recurring amount, or a percentage of the year’s remaining income, or a % of the remaining loan balance, or model paying as much as the simulation engine determines is possible.
It’s also worth noting that if you want, you can scope the extra payments goal to only apply during a specific range of years, or between certain milestones.
