This **mortgage payment calculator** estimates your monthly payment level with or without extra payment, payoff date and the total you will owe (principal + interest). There is in more info on this subject below the form.

## How does the mortgage payment calculator work?

This financial tool was designed to help in simulating any mortgage loan plan by two different approaches (Method 1 and Method 2), thus depending on the desired method the user is requested to input these variables:

- In case of first tab the user should know these figures:

- Loan amount taken;

- Loan term in years;

- Annual interest rate % as offered by the lender;

- Payment frequency (weekly, bi-weekly, monthly, bi-monthly, quarterly, semi-annually or annually);

- Loan start date month and year;

The payment details which are displayed consist in these details:

- Monthly or any other desired frequency payment value (weekly, bi-weekly, bi-monthly, quarterly, semi-annually or annually);

- Total paid (principal plus cost with interest);

- Total interest paid value;

- Loan term in months;

- Approximate payoff date;

- Amortization schedule with the detailed payment plan.

- In case of the second tab, the algorithm considers the following variables:

- Current mortgage balance;

- Annual interest rate;

- Current monthly payment;

- Additional/extra monthly contribution to the standard payment.

The payment information that is displayed in this case includes the comparison between the two scenarios:

* Payoff WITHOUT an extra monthly payment

- Monthly payment value;

- Number of the remaining payments;

- Time to payoff;

- Total interest paid;

- Total paid;

* Payoff WITH an extra monthly payment

- Additional monthly payment added to the regular one;

- Adjusted monthly payment amount (regular + extra);

- No. of regular payments left;

- Time to payoff;

- Total interest owed;

- Total paid.

* Savings made by paying extra on a regular basis (from the interest not being paid).

* The no. of regular payments you will avoid by paying early.

In both methods the algorithm behind this *mortgage payment calculator* applies the standard compound interest formula. For instance in case of payments made month by month this equation is:

M = P[i(1+i)^n]/[(1+i)^n -1]

Where:

P = loan amount borrowed / Principal owed

i = interest rate per month in decimal format

n = the term in months obtained by multiplying the loan term in years with 12

## Example of 2 scenarios

Case 1: A mortgage plan with the following characteristics:

- Loan amount = $100,000

- Term = 15 years

- Yearly interest rate = 3.8%

- Payments are made on a monthly basis

- Start date is March 2015.

Results:

■ Monthly payment: $729.71

■ Loan amount: $100,000.00

■ Total Paid: $131,346.99

■ Total Interest Paid: $31,346.99

■ Loan term: 180 months

■ Annual Interest rate: 3.80 %

■ Payment frequency: Monthly

■ Payoff date: February, 2030

Case 2: An existing mortgage loan where the owner wants to see what happens in case he adds extra payment:

- Existing balance = $150,000

- Average annual interest rate = 3.5%

- Current monthly payment = $1,000

- Desired extra payment = $300

Results:

Payoff WITHOUT an Additional/Extra Monthly Principal Payment

■ Monthly payment amount: $1,000.00

■ Remaining payments: 197.56

■ Time to payoff: 16 years & 6 months

■ Total interest paid: $47,555.25

■ Total paid for the mortgage: $197,555.25

Payoff WITH an Additional/Extra Monthly Principal Payment

■ Additional monthly payment to principal: $300.00

■ Adjusted monthly payment amount: $1,300.00

■ Remaining payments: 140.87

■ Time to payoff: 11 years & 9 months

■ Total interest paid: $33,136.17

■ Total paid for the mortgage: $183,136.17

■ Savings made by adding extra monthly payment to principal: $14,419.08

■ By paying early you will make fewer payments in a number of 56.68 payments.