Primerica SMART Loan vs. conventional loan?

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I'm trying to compare my existing conventional mortgage (27 years remain on a 30 years loan at 5.85%) to a Primerica SMART loan (23 years at 5.93%).

I'm looking to refinance to eliminate a 2nd mortgage (15 year + balloon 2nd at 7.5%). And I'm wondering how to best compare a conventional to a SMART loan.

Thanks!

Primerica SMART Loan vs. conventional loan?

Primerica's SMART loan uses simple interest calculation while a conventional mortgage uses schedule interest calculation.

Schedule interest is where payments are credited to interest and principal on the due date, whether you pay it a little early or little late. Most lenders use schedule interest method. Your amortization schedule is already fixed since the first day you sign the loan contract.

Simple interest is where the interest portion of the payment depends on the actual number of days that have past since the last payment. If you pay it early, more of your payment is applied toward the principal. If its late, more goes toward interest. If its on time, there is no difference between schedule interest and simple interest. However, if you were offered a bi-weekly payment (meaning your monthly payment is split in half and you pay this amount every 14 days), the savings on a simple interest method is huge!

Take a look at this example:

$100,000 loan with a 10% interest.

Monthly payment is $877.57

With schedule interest calculation (which is used in mortgages), this is how the loan work:

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Primerica SMART Loan vs. conventional loan?

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