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Remaining Term Formula:
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The remaining term calculation estimates how many months are left on a mortgage based on the current balance, interest rate, and monthly payment amount. This helps homeowners understand how long it will take to pay off their mortgage under current terms.
The calculator uses the following equation:
Where:
Explanation: The equation solves for time (n) in the standard loan amortization formula, showing how many payments remain at the current rate and payment amount.
Details: Knowing your remaining term helps with financial planning, refinancing decisions, and understanding the impact of extra payments. It shows how much time is left until your mortgage is paid off under current conditions.
Tips: Enter your current mortgage balance in dollars, monthly interest rate as a decimal (e.g., 0.004167 for 5% annual rate), and your current monthly payment amount. All values must be positive numbers.
Q1: Why does my remaining term differ from my original term?
A: This could be due to extra payments, rate changes (if ARM), or refinancing. The calculation shows the actual remaining time based on current numbers.
Q2: How accurate is this calculation?
A: It's accurate if your payment and rate stay constant. For ARMs or if you change payments, you'll need to recalculate.
Q3: What if I make extra payments?
A: Extra payments reduce your remaining term. You'd need to include the extra amount in your payment value for an accurate calculation.
Q4: Why use monthly rate instead of annual?
A: Mortgage payments are monthly, so we use the monthly rate (annual rate ÷ 12) for accurate monthly calculations.
Q5: What does a negative result mean?
A: A negative or invalid result typically means your payment is too small to ever pay off the loan at the given interest rate.