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Chatham financial has a good one. I've generally found its pretty close.
All you have to do is email the address to info@astdefeasance or call (866)-DEFEASE and they send you a complete (free) package. You'd be surprised at the mistakes you can make on the online calculators.
Waterstone Defeasance - John Felter has a great product and helps to save you money in the way the securities are held for defeasance, and the fees and spread you pay. As you may you the rate of the securities in the interpolated rate and it not entirely accurate. I know typical companies and banks pocket the difference, but Waterstone passes these savings on to you.
I've used defease with ease and gives you a pretty good and accurate estimate.
I've also used M&T's model, pretty good too.
I've heard of AST too. Normally they're the cheapest by far, and they've even caught some of their competitors' mistakes for me.
I've used DefeaseWithEase and the Chatham Financial Defeasance calculator. both are relatively accurate. Trepp has a Defeasance estimate on there as well, but is usually less accurate than the other two methods I have tried.
It's fairly easy to build your own model (and have full transparency).
- Build an excel schedule with the debt service payments, including the final payoff - Find a yield curve for the required collateral (usually treasuries) I'm new here and can't post links, but you can get these from the Treasury web site or from brokers, lenders, etc who work with them. - Discount each payment back with the corresponding bond
For example, the payment due one year from now would be PVd back to today at 0.64%.
With the current rate curve, you are essentially prepaying all future payments. There isn't much of a discount. You can get pretty close just by summing up all future payments.
Build it once, and amaze your friends.
Interesting. I'll do that and compare.
My clients scenario is different than many. He's 10.5 yrs into a 15/15 note. His current monthly payments have massive principle reduction. His prepay expires day 1 of year 14.
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