Mortgage tools that protect the plan — and the relationship.

Selling cost equals estimated capital-gains tax plus the compounded growth forfeited on the amount sold. Tax is the taxable gain multiplied by the capital-gains tax rate you enter. If you enter a cost basis, taxable gain is the amount needed minus that basis, and it is never below zero. A basis above the amount needed is treated as no taxable gain. This illustration does not apply a tax benefit for a loss. Forfeited growth is the amount needed multiplied by (1 + annual return) raised to the number of years, minus the amount needed. A negative growth figure means the entered return is a loss, so selling avoids that decline.

Borrowing cost equals total interest on a fully amortizing loan plus the closing costs you enter. The monthly payment is calculated from the amount, the loan rate, and the term. Total interest is that payment multiplied by the number of months, minus the amount borrowed. Payments reduce the balance, so this is not interest on the full amount for the entire term. The monthly payment and the total paid are context. They are not added again on top of interest and closing costs.

The breakeven point is the annual portfolio return at which the two illustrated costs are equal. Every rate is an assumption you enter. None of these figures is an advertised rate, a quote, a rate lock, or an offer to lend from The 2 Mortgage Guys or Luminate Bank.

The regular payment is the fully amortizing principal-and-interest payment from the current balance, the mortgage rate, and the remaining term. Taxes and insurance are not included. Both choices use the same monthly cash through the original end date: that scheduled payment plus the extra amount.

On the pay-down path, the extra amount reduces principal each month, so the loan is paid off sooner. In the payoff month, any cash not needed to finish the loan is invested. After payoff, the scheduled payment plus the extra amount is invested each month until the original end date. Interest paid is the interest charged before payoff.

On the invest path, the loan is paid on its original schedule and only the extra amount is invested each month until that same date. Interest paid is the interest charged over the full remaining term. Both paths end with the mortgage paid off. The wealth difference is the gap between the two investment balances.

The investment return is applied monthly as one-twelfth of the annual rate you enter, with each deposit added at the end of the month. The return is used exactly as entered, so type an after-tax return if you want taxes reflected. The breakeven return is the annual rate at which the two ending balances are equal. If they do not meet between 0% and 20%, the note says so. This is a calculation under your assumptions, not a recommendation. The mortgage rate and the investment return are not advertised rates, quotes, or offers to lend.

Home value grows monthly at the annual appreciation assumption. The existing mortgage accrues interest monthly and is reduced by the principal-and-interest payment entered. Property taxes, homeowners insurance, association dues, and maintenance are not included and continue under every path.

The reverse path first uses the amount available to pay off the existing mortgage and finance the entered upfront costs. If that amount is not enough, the path is marked unavailable and no partial reverse result is shown. Otherwise, monthly advances continue until the entered amount available is used. Interest accrues on the balance, no new principal-and-interest payment is modeled, and unused availability does not grow in this illustration.

The HELOC path keeps the existing mortgage. Upfront costs and monthly advances count against the credit limit. Interest-only payments cover monthly interest. For principal and interest, each advance is amortized over the term entered. Principal repaid does not replenish the illustrated credit limit, so later advances stop after cumulative draws reach that limit.

The selling path keeps the existing mortgage and sells enough investments each month to net the requested cash after estimated capital-gains tax. The taxable-gain share and tax rate determine the tax withheld from each sale. The remaining portfolio compounds monthly at the return entered. If the portfolio cannot fund a full month, the partial net amount is shown and later months receive no new cash.

Ending estate total equals illustrated remaining home equity plus the remaining portfolio. Home equity never appears below zero. Loan payments, taxes, insurance, maintenance, investment fees, and other income or spending are not deducted from the portfolio unless described above. Heirs may keep, sell, or refinance the home subject to actual program rules. This is a calculation under entered assumptions, not a recommendation.

The current payment is fully amortizing principal and interest from the current balance, the current interest rate, and the remaining term. Each scenario keeps that balance and that remaining term. Only the rate changes, by 0.5, 1, and 1.5 percentage points. Monthly savings are the current payment minus the scenario payment. Estimated 12-month savings are the monthly savings multiplied by 12.

Closing costs, taxes, insurance, and mortgage insurance are not included, and the term does not change. Refinance Breakeven is the detailed next step when the conversation includes closing costs, a different term, and the month the refinance pays for itself. Every rate is the rate you enter or a reduction from that rate. None of these figures is an advertised rate, a quote, a rate lock, or an offer to lend from The 2 Mortgage Guys or Luminate Bank.

This is a rate-and-term illustration of principal and interest only. The current payment comes from the current balance, the current rate, and the remaining term. Closing costs are added to that balance and are not modeled as cash paid at closing. The new payment uses the higher amount, the new rate, and the new term. Taxes, insurance, and mortgage insurance are not included.

Amount is the starting principal. Total interest is the interest charged over that loan’s term. Total paid is the principal plus that interest. The monthly payment difference compares the two principal-and-interest payments.

Months to break even is the first month when payments made so far plus the remaining balance are lower on the new loan. After the current loan would end, its payment is zero and its balance is zero, so its cost stays at the total paid. A longer new term is still counted through the end of the new loan. If the refinance never costs less, the result says so and names which loan costs less over that full comparison.

Both rates are assumptions you enter. They are not advertised rates, quotes, rate locks, or offers to lend from The 2 Mortgage Guys or Luminate Bank. The result is a calculation, not a recommendation.

The loan amount is the purchase price minus the down payment. Principal and interest is the fully amortizing payment from that amount, the entered rate, and the term. Monthly housing cost is that payment plus the expenses entered. Expenses mean taxes, insurance, HOA, and any other monthly costs other than principal and interest.

DSCR is gross monthly rent divided by that housing cost, shown to two decimals. This is the same rent-divided-by-housing-cost measure already described for DSCR loans. Rent is used exactly as entered, with no vacancy allowance. Monthly cash flow is rent minus the housing cost and can be negative.

Cash-on-cash return is twelve months of that cash flow divided by the down payment. Cash invested is the down payment only. If the down payment is $0, cash-on-cash is not defined because no cash is invested.

The rate is the planner’s assumption, not an advertised rate, a quote, or an offer to lend from The 2 Mortgage Guys or Luminate Bank. The result is a calculation, not an approval or a recommendation.

Both loans use the same amount and cover principal and interest only. The 15-year payment comes from that amount, the 15-year rate, and a 15-year term. The 30-year payment comes from the same amount, the 30-year rate, and a 30-year term. Taxes, insurance, and mortgage insurance are not included. Total interest is the interest charged over that loan’s term. Total paid is principal plus that interest.

The monthly payment difference compares the two principal-and-interest payments. How much more interest the longer loan charges is the 30-year total interest minus the 15-year total interest. If the 15-year payment is not higher, there is no difference to invest, and the interest comparison is still shown.

When the 15-year payment is higher, both choices spend that higher amount every month for 30 years. The 15-year path pays the loan until it is gone, then invests that full payment each month through year 30. The 30-year path keeps the lower payment for 30 years and invests the payment difference every month for those 30 years. What the difference grows to is the ending balance of those monthly difference deposits. The 15-year path’s ending investment balance is the balance of the deposits made after the loan is paid off. The wealth gap is the difference between those two ending balances. Both paths end with the loan paid off.

The investment return is applied monthly as one-twelfth of the annual rate entered, with each deposit added at the end of the month. The return is used exactly as entered, so type an after-tax return if taxes should be reflected. The breakeven return is the annual rate between 0% and 20% at which the two ending balances are equal. If they do not meet in that range, the note says so. This is a calculation under the entered assumptions, not a recommendation. The rates and the investment return are not advertised rates, quotes, or offers to lend.

Bridge financing cost is the interest-only charge for each month the bridge is outstanding, multiplied by the number of months, plus the closing costs entered. Monthly interest equals the bridge amount times the annual rate divided by 12. Interest is not compounded, and closing costs are not added to the amount used for interest. Principal due at payoff is the bridge amount. It is shown separately because it is repaid, usually from the sale of the current home, and it is not a financing cost.

The sell-first price hit is the current-home sale price multiplied by the quick-sale discount. That discount is the estimated reduction accepted to sell the current home quickly, so the purchase of the next home does not depend on that sale. The contingent-offer price hit is the next-home price multiplied by the contingent-offer premium. That premium is the estimated extra price paid to strengthen an offer that is contingent on selling the current home.

The three illustrated costs are the bridge financing cost, the sell-first price hit, and the contingent-offer price hit. Dollar differences compare those amounts. The lowest illustrated cost is the smallest of the three. The breakeven discount is the quick-sale discount that makes the sell-first price hit equal the bridge financing cost. The breakeven premium is the contingent-offer premium that makes the contingent-offer price hit equal the bridge financing cost.

This illustration does not include the cost of owning two homes at once, such as property taxes, insurance, association dues, utilities, or maintenance. It also leaves out moving costs, temporary housing, real estate commissions, seller concessions beyond the discount entered, appraisal gaps, changes in home value, the opportunity cost of equity, points beyond the closing costs entered, and prepayment penalties. It does not check whether the bridge amount is available from home equity. The figures are illustrations under the assumptions entered, not recommendations, approvals, or guarantees. The rate, the quick-sale discount, and the contingent-offer premium are planner-provided assumptions, not advertised terms or offers to lend.

The monthly principal-and-interest payment is fully amortizing. It uses the loan amount, the annual rate divided by 12, and the term in months. Total interest is that payment multiplied by the number of months, minus the loan amount. Payments reduce the balance, so this is not interest on the full amount for the entire term.

Property tax and homeowners insurance are annual amounts divided by 12. HOA is the monthly amount entered. A blank tax, insurance, or HOA field is treated as $0. Those amounts are added only to the monthly housing total. Term and rate scenarios stay principal and interest only.

Term scenarios keep the loan amount and the entered rate, and show 15, 20, and 30 years, plus the entered term when it is different. Rate scenarios keep the loan amount and the entered term, and show that rate plus and minus 0.25 and 0.50 percentage points when the shifted rate stays above 0% and at most 25%. Every rate is an assumption you enter. None of these figures is an advertised rate, a quote, a rate lock, or an offer to lend from The 2 Mortgage Guys or Luminate Bank.