Yield to Call (YTC) Calculator
Estimate a callable bond’s yield to call from its coupon, call price, current market price, and time until the call date.
Result
- Annualized call gain/loss$10.00
- Average of call & price$1,035.00
- Approximate YTC5.7971%
- Current yield (coupon ÷ price)4.902%
- Premium/discount to call pricediscount $30.00
Step-by-step
- Annualized gain to call = (call − price) ÷ years = ($1,050.00 − $1,020.00) ÷ 3 = $10.00.
- YTC ≈ [coupon + annualized gain] ÷ [(call + price)/2] = [$50.00 + $10.00] ÷ $1,035.00.
- Approximate YTC = 5.797%.
How to use this calculator
- Enter the annual coupon in dollars (coupon rate × face value).
- Enter the call price and the current market price.
- Enter the number of years until the first call date.
- Read the approximate yield to call and compare it with current yield.
About this calculator
Many bonds are callable, meaning the issuer can redeem them early — usually at a small premium to par called the call price — typically when interest rates fall and they want to refinance cheaper. Yield to call (YTC) is the return you would earn if the bond is called at the first opportunity rather than held to maturity. This calculator uses the standard approximation: it adds the annual coupon to the annualized gain or loss between today’s price and the call price, then divides by the average of those two prices. Because issuers call bonds when it benefits them (not you), the YTC is often lower than the yield to maturity, and prudent investors evaluate the "yield to worst" — the lower of the two. The exact YTC is an internal rate of return; this approximation is close enough for quick comparison.
How it works — the formula
YTC ≈ [C + (Call price − Price) / n] / [(Call price + Price) / 2]
(C = annual coupon, n = years to call)Coupon income plus the annualized price move to the call value, expressed against the average capital, approximates the annual yield if called.
Worked examples
- Inputs:
- coupon=50, callPrice=1050, price=1020, years=3
- Output:
- ≈ 5.80%
- Inputs:
- coupon=60, callPrice=1000, price=1080, years=5
- Output:
- lower YTC (bought at premium)
- Inputs:
- coupon=40, callPrice=1020, price=980, years=2
- Output:
- higher YTC (bought at discount)
Limitations
- Approximation; exact YTC is an internal rate of return.
- Single call date; real bonds may have a call schedule.
- Ignores accrued interest and tax treatment.
Estimate for comparison; not investment advice.