Mortgage Payoff Calculator for Refinance

Mortgage Payoff Formula:

\[ n = \frac{\log\left(\frac{M}{M - P \times r}\right)}{\log(1 + r)} \]

Number of Payments:

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1. What is a Mortgage Payoff Calculator for Refinance?

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

Purpose: It helps homeowners understand the payoff timeline when refinancing their mortgage.

2. How Does the Calculator Work?

The calculator uses the formula:

\[ n = \frac{\log\left(\frac{M}{M - P \times r}\right)}{\log(1 + r)} \]

Where:

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

Explanation: The formula calculates how many payments are needed to amortize the loan completely.

3. Importance of Mortgage Payoff Calculation

Details: Understanding your payoff timeline helps with financial planning and comparing refinance options.

4. Using the Calculator

Tips: Enter your monthly payment, principal amount, and monthly interest rate (annual rate ÷ 12). Default monthly rate is 0.005 (6% APR).

5. Frequently Asked Questions (FAQ)

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

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

Q3: What if I make extra payments?
A: This calculator assumes fixed regular payments. Extra payments would reduce the payoff time.

Q4: Why does my actual loan term differ?
A: Lenders typically round to whole months, and final payments may be adjusted.

Q5: Can I use this for other loans?
A: Yes, it works for any fixed-rate amortizing loan (car loans, personal loans, etc.).