Mortgage Payoff Calculator

How to calculate Mortgage payoff calculator?

The calculator recomputes your remaining amortization schedule after applying extra payments to principal, showing the new payoff date and interest saved.

Key formula for the standard monthly payment: M = P * (r(1+r)^n) / ((1+r)^n - 1) where P = principal, r = monthly interest rate, and n = total number of payments.

Using the Mortgage payoff calculator calculator: an example

Example inputs: P = $300,000; annual rate = 4.0%; remaining term = 25 years; extra monthly = $200.

Step-by-step calculation:

• Convert annual to monthly rate: r = 4.0% / 12 = 0.003333.
• Compute original monthly payment using the formula: M ≈ $1,583 for P = $300,000 and n = 300 months (25 years).
• Add the extra $200 (new payment ≈ $1,783) and solve for the new number of payments: n ≈ 247 months (≈20.6 years).
• Compare schedules: you save about 53 months (≈4 years 5 months) and a substantial amount in interest by paying the extra $200 monthly.

Frequently Asked Questions

Will small extra payments make a difference?

Yes. Even modest monthly extras reduce principal faster, which compounds into fewer payments and noticeably lower total interest over the loan term.

Should extra payments be applied to principal or the next scheduled payment?

To maximize savings, direct extra amounts to principal reduction rather than prepaying future installments; confirm with your lender that extras are applied to principal.

Does this calculator include taxes, insurance, or lender fees?

No. This tool models principal and interest only. Taxes, insurance, HOA dues and lender fees are excluded; include those separately when planning your budget.