Mortgage Stratosphere
Optimize your real estate equity. High-precision amortized projections with advanced prepayment arbitrage for maximum interest recapture.
Input capital markers to map equity
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Fiscal Architecture: Mastering Real Estate Debt
"Equity isn't just owned—it's engineered. The difference between a 30-year liability and a 15-year asset lies in the math of prepayments."
Interest Neutralization
By injecting capital early, you bypass the heavily front-loaded interest phase of standard amortization. Use our Loan Calculator to see the baseline numbers.
Equity Velocity
Prepayments increase your ownership percentage faster, providing greater leverage for future refinancing or HELOCs.
Arbitrage Logic
Calculate if your capital performs better as a prepayment or a separate investment based on your effective yield.
Prepayment Strategies Comparison
Different prepayment strategies have different impacts on your mortgage. Choose based on your financial goals.
| Strategy | Best For | Impact | Risk Level |
|---|---|---|---|
| Lump Sum Prepayment | Windfalls, bonuses, inheritance | Maximum interest savings | Low |
| Monthly Extra Payment | Steady income, disciplined savers | Consistent principal reduction | Low |
| Bi-Weekly Payments | Bi-weekly paychecks | 13 payments/year instead of 12 | Low |
| Refinance to Shorter Term | Lower rates available | Higher monthly payment, faster payoff | Medium |
Frequently Asked Questions
Q: What is Amortization?
The process of spreading out a loan into a series of fixed payments over time. Early payments are mostly interest; later payments are mostly principal.
Q: Why prepay early?
Interest is calculated on the remaining principal. Reducing principal early has an exponential effect on total interest because you're cutting off years of compounding.
Q: Recast vs Refinance?
Prepayments allow for recasting (lowering monthly payments without changing the rate) for a small fee (~$250). Refinancing changes the rate but costs $2,000-5,000 in closing costs.
Q: Is there a prepayment penalty?
Most modern mortgages (post-2014) have no prepayment penalties. Always check your specific mortgage contract, especially for jumbo loans or non-conforming mortgages.
Q: Should I prepay or invest?
If your mortgage rate is 3%, but you can earn 8% in the stock market, investing may be better. However, prepaying is a guaranteed return equal to your interest rate with zero risk.
Q: How much should I prepay?
Only prepay after maxing out tax-advantaged accounts (401k, IRA) and maintaining a 6-month emergency fund. Extra cash beyond that can go toward prepayments.