1. What is the Mortgage Payoff Calculator?

The Mortgage Payoff Calculator determines how many months it will take to fully pay off a loan based on your current balance, monthly payment, and interest rate.

2. How Does the Calculator Work?

The calculator uses the mortgage payoff formula:

Where:

• \( PMT \) — Monthly payment amount (USD)
• \( Balance \) — Current loan balance (USD)
• \( r \) — Monthly interest rate (decimal)

Explanation: The formula calculates the time required to pay off a loan by considering the relationship between payments, balance, and interest.

3. Importance of Payoff Calculation

Details: Knowing your payoff timeline helps with financial planning, assessing refinancing options, and understanding how extra payments can shorten your loan term.

4. Using the Calculator

Tips: Enter your exact monthly payment, current loan balance, and monthly interest rate (annual rate divided by 12). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why does my calculation show "Invalid inputs"?
A: This occurs when your payment is less than the monthly interest, meaning you'll never pay off the loan with that payment amount.

Q2: How does extra payments affect payoff time?
A: Extra payments directly reduce principal, significantly shortening payoff time. Recalculate with higher PMT to see the effect.

Q3: What's the difference between monthly and annual rate?
A: Divide your annual percentage rate (APR) by 12 to get the monthly rate for this calculator.

Q4: Does this work for other types of loans?
A: Yes, it works for any fixed-rate amortizing loan (personal loans, auto loans, etc.).

Q5: Why is my actual payoff different?
A: This assumes fixed payments and rate. Changes in rates, payment amounts, or fees will affect actual payoff.