When should YTC be used instead of YTM?

Use YTC when the bond is trading above par and the call date is near, making early call by the issuer likely. For callable bonds trading at or below par, YTM is more appropriate as issuers have little incentive to call when refinancing at a lower rate is not advantageous.

How is the call price different from par?

Call prices are typically set above par (e.g., 102 or 103) to compensate bondholders for early redemption. The call price usually steps down toward par on a schedule and reaches par at the first par call date. YTC calculation substitutes call price for par value.

Yield to Call (YTC) by Call Date

Calculate yield-to-call assuming the bond is redeemed at the specified call date and call price, relevant for callable bonds trading above par where early redemption is likely.

Principal ($)

Annual Rate (%)

Years

Compounding / Year

$ Finance Disclaimer: These calculators are for educational and illustrative purposes only. Results do not constitute financial advice. Consult a licensed financial advisor before making investment or borrowing decisions.

How to Use

Enter the values for the scenario you are assessing. Calculate yield-to-call assuming the bond is redeemed at the specified call date and call price, relevant for callable bonds trading above par where early redemption is likely. Use the yield to call result to inform your calculation.

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