1. What is a Mortgage Calculator for Early Payoff?

Definition: This calculator determines how many payments you'll need to make if you add extra payments to your mortgage.

Purpose: It helps homeowners understand how extra payments can reduce the loan term and total interest paid.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( n' \) — Reduced number of payments
• \( P \) — Principal loan amount (USD)
• \( r \) — Monthly interest rate (decimal)
• \( M \) — Regular monthly payment (USD)
• \( E \) — Extra monthly payment (USD)

Explanation: The formula calculates how many payments would be needed when applying extra amounts to principal.

3. Importance of Early Payoff Calculation

Details: Making extra payments can save thousands in interest and shorten your loan term significantly.

4. Using the Calculator

Tips: Enter your principal, interest rate (as decimal), regular payment, and any extra payment you plan to make.

5. Frequently Asked Questions (FAQ)

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

Q2: What if I get "Invalid (payment too low)"?
A: This means your payments don't cover the interest. Increase payment amount.

Q3: How accurate is this calculation?
A: It's mathematically precise for fixed-rate loans with consistent extra payments.

Q4: Can I use this for other loans?
A: Yes, it works for any fixed-rate amortizing loan (car, personal, etc.).

Q5: How much will extra payments save me?
A: Use our Mortgage Savings Calculator to see total interest savings.