Mortgage Calculator Mortgage Payoff

Mortgage Balance After n Payments Formula:

\[ Balance\ After\ n = P \times \frac{(1+r)^n - (1+r)^{n-k}}{(1+r)^n - 1} \times PMT \]

Principal (P):

Monthly Interest Rate (r):

decimal

Total Payments (n):

payments

Payments Made (k):

payments

Monthly Payment (PMT):

Remaining Balance:

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is the Mortgage Balance Calculator?

The Mortgage Balance Calculator determines the remaining loan balance after a specified number of payments have been made. It helps homeowners track their equity and plan for refinancing or early payoff.

2. How Does the Calculator Work?

The calculator uses the mortgage balance formula:

\[ Balance\ After\ n = P \times \frac{(1+r)^n - (1+r)^{n-k}}{(1+r)^n - 1} \times PMT \]

Where:

$ P $ — Principal loan amount ($)
$ r $ — Monthly interest rate (decimal)
$ n $ — Total number of payments
$ k $ — Number of payments made
$ PMT $ — Monthly payment amount ($)

Explanation: This formula calculates the remaining principal balance by considering the amortization schedule and the portion of payments that have gone toward principal reduction.

3. Importance of Mortgage Balance Calculation

Details: Knowing your remaining mortgage balance is essential for financial planning, refinancing decisions, home equity calculations, and determining if you should make extra payments to reduce interest costs.

4. Using the Calculator

Tips: Enter the original principal amount, monthly interest rate (annual rate ÷ 12), total number of payments (loan term in years × 12), number of payments already made, and your monthly payment amount.

5. Frequently Asked Questions (FAQ)

Q1: How do I convert annual interest rate to monthly?
A: Divide the annual percentage rate by 12. For example, 6% annual = 0.06 ÷ 12 = 0.005 monthly rate.

Q2: Why does my balance decrease slowly at first?
A: In the early years, most of your payment goes toward interest rather than principal, which is how amortization works.

Q3: Can I use this for extra payments?
A: This calculator assumes regular payments. For extra payments, you would need a more advanced amortization schedule.

Q4: What if I have an adjustable-rate mortgage?
A: This calculator works best for fixed-rate mortgages. For ARMs, you would need to account for rate changes over time.

Q5: How accurate is this calculation?
A: Very accurate for standard fixed-rate mortgages. Small variations may occur due to rounding differences with your lender's calculations.