HP calculators

[g_schaefer]

Can an HP calculator solve for a "Discounted Yield Maintenance Prepayment Fee"?  This is a type of prepayment fee on a commercial property mortgage.  Which HP calculator will solve for this.  Thanks!

[cyrille]

Hello,

Not that I know, unless this calculation goes by another name.

Most of the HP calculators are programmable and can probably be used to make this calculation, but they do not do it natively.

Cyrille

[g_schaefer]

Cyrille - Thanks!   I was looking for any easy way out, but I am just going to have solve it with pencil and paper.  I can get some help using Excel for long calculations.

[Jan_D]

I did some research on the internet and  I have the impression that there is a lot of confusion about the meaning of Yield Maintenance Prepayment Fees.

I do not know which formula or algorithm you want to use , but on this page I found some examples which seem rather logical to me:

http://albcommercialcapital.com/news/wp-content/uploads/2013/10/Yield_Maintenance.pdf

When I understand the method well you should add all future monthly payments from prepayment date until maturity, add this to the balloon payment at maturity, correcting all this for their present value at prepayment date, using the interest rate given by the treasury yield.

The result you have to subtract from the loan balance at prepayment date.

Some examples are worked out, but in my opinion they are not correct.

I calculated it on my Prime, but any financial calculator could do this and found a result which is the same as given by this online calculator:

http://www.crefcoa.com/yield-maintenance-calculator.html