1. What is a Mortgage Loan Payoff Calculator?

Definition: This calculator determines how many payments are needed to pay off a loan based on the monthly payment amount, principal, and interest rate.

Purpose: It helps borrowers understand how long it will take to pay off their mortgage or loan under current payment terms.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( n \) — Number of payments (unitless)
• \( M \) — Monthly payment amount (USD)
• \( P \) — Loan principal (USD)
• \( r \) — Monthly interest rate (decimal)

Explanation: The formula calculates how many periods are required to pay off a loan with fixed payments and a constant interest rate.

3. Importance of Loan Payoff Calculation

Details: Understanding your payoff timeline helps with financial planning, comparing loan options, and evaluating the impact of extra payments.

4. Using the Calculator

Tips: Enter your fixed monthly payment, the original loan amount (principal), and the monthly interest rate (annual rate ÷ 12). All values must be > 0.

5. Frequently Asked Questions (FAQ)

Q1: How do I convert annual rate to monthly?
A: Divide the annual percentage rate (APR) by 12 (months) and by 100 (to convert to decimal).

Q2: Does this include taxes and insurance?
A: No, this calculates based on principal and interest only (P&I). For full payment including escrow, adjust accordingly.

Q3: What if I make extra payments?
A: This calculator assumes fixed payments. For extra payments, you'd need a different amortization calculator.

Q4: Why does the result have decimals?
A: The calculation may result in partial payments. Round up to the next whole number for actual payment count.

Q5: How accurate is this calculation?
A: It's mathematically precise for fixed-rate loans with constant payments, assuming no fees or changes in terms.