1. What is a Mortgage Payoff Calculator?

Definition: This calculator determines how many payments are needed to fully pay off a mortgage based on current loan details.

Purpose: It helps homeowners understand their remaining payment timeline and plan their finances accordingly.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( n \) — Number of payments remaining (unitless)
• \( M \) — Monthly payment amount (USD)
• \( B \) — Current loan balance (USD)
• \( r \) — Monthly interest rate (decimal)

Explanation: The formula calculates how many periods are needed to amortize the current balance given the payment amount and interest rate.

3. Importance of Mortgage Payoff Calculation

Details: Understanding your payoff timeline helps with financial planning, refinancing decisions, and evaluating prepayment options.

4. Using the Calculator

Tips: Enter your regular monthly payment, current loan balance, and monthly interest rate (annual rate ÷ 12). All values must be > 0.

5. Frequently Asked Questions (FAQ)

Q1: How do I find my monthly interest rate?
A: Divide your annual interest rate by 12 (e.g., 6% annual = 0.06/12 = 0.005 monthly).

Q2: Does this account for extra payments?
A: No, this calculates based on your regular payment amount. For extra payments, use an amortization calculator.

Q3: Why does the result have decimal payments?
A: The calculation is precise - you would make a partial final payment in the last month.

Q4: What if my payment doesn't cover the interest?
A: The formula won't work if M ≤ B×r (negative amortization). Your balance would grow, not shrink.

Q5: How accurate is this calculation?
A: It's mathematically precise for fixed-rate loans with constant payments. Adjustable rates may vary.