Personal Finance

How to calculate best way to pay down multiple loans w/ diff rates and and terms?

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  • Jul 16th, 2015 12:46 pm
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[OP]
Deal Addict
Jan 1, 2002
3729 posts
416 upvotes

How to calculate best way to pay down multiple loans w/ diff rates and and terms?

I had a similar thread in the Mortgage thread, but it's really specific to loan pay down, hoping to get more visibility.


I have a five year fixed at 2.99% with a balance of 159k maturing 2019, bi-weekly $540.

I have a 5 year fixed on my heloc at 2.59 with a balance of 37k maturing in 2020, rapid bi-weekly $122.

Is there a tool to help me figure out how to balance the payments to pay it off more efficiently?

Regardless of how I distribute the
Payment %, I'm using a fixed amount of $660 bi-weekly.

I obtained the 2nd mortgage by using the TD flexline feature of paying down my original mortgage with the yearly 15% that you are allowed to pay down using my HELOC for the funds and I lock that payment in to my HELOC as a 5 year fixed payment with a rate that was lower than my original mortgage rate 2.99 vs 2.59)

I don't have extra cash, the bi-weekly payments split between the two is equal to the total payment I was paying when it was all together on the first mortgage.

I plan to do the same in January when you are allowed to pay %15 down off your original principal and I would then put that portion on the flex line heloc and again I would keep payments the same but spread out across the three, assuming current rates are still less than 2.99% (rate of original mortgage).

So I don't know how to split out the payments using a fixed amount of $660 bi-weekly in the most efficiently way possible.

Before you ask, my rep at TD wasn't able to help me with my question.

Thank you for any feedback you can provide.
4 replies
Deal Addict
Feb 4, 2008
3137 posts
178 upvotes
No calculator needed. Pay the one with the highest interest rate.
Do your mortgage math correctly!
Deal Addict
User avatar
Nov 26, 2003
1286 posts
355 upvotes
If you don't have extra cash I don't understand the reason for your question. Just keep paying the minimum payments
Deal Addict
Apr 22, 2014
3097 posts
472 upvotes
Oshawa, ON
Best way is always pay minimums on lower rates and all extra to highest rate.
But yes, your question doesn't make sense.
[OP]
Deal Addict
Jan 1, 2002
3729 posts
416 upvotes
Thanks for the feedback, I guess I was making it more complicated then it had to.

The way I originally did it was to make sure the amortization end date on both sets of loans were close to being equal and made sure the overall amortization was reduced lower than the original amortization of the original mortgage. So I ended up dropping about 2 months of amortization end date.

I sent an email asking to lower the lower rate mortgage as low as possible and increase the difference on the higher rate one.

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