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How to Calculate a Mortgage or Loan Payoff Amount
Tutorial 25

Calculating a loan payoff amount as of a specific date is easy with the Ultimate Financial Calculator. The calculator considers all on time, late, missed and extra payments. It can also accommodate payment and interest rate changes.

This example applies to our online    Ultimate Financial Calculator. The     C-Value! program for Windows works in a similar way and has a few more features including the ability to save your work.

All users should work through the first tutorial to understand basic concepts about the calculator.

To calculate a mortgage or loan balance and record payments as they are made, follow these steps:

  1. Set "Schedule Type" to "Loan"
    • Or click the [Clear] button to clear any previous entries.
    • The top two rows of the grid will not be empty
    • Delete the 2nd row by selecting it and clicking on the [Delete] button
  2. Set "Rounding" to "Open balance — no adjustment" by clicking on {Settings} {Rounding Options}
    • This setting is what allows you to enter single payments
    • Any other setting forces the calculator to adjust the final payment so the balance is zero
  3. Set the "Days Per Year" option to "360 Days Per Year" by clicking on the {Setting} {360 / 365 Days}
  4. In the header section, make the following settings:
    1. For "Calculate Method" select "Normal".
    2. Set "Initial Compounding" to "Monthly".
    3. Enter 5.25 for the "Initial Interest Rate".
  1. In row one of the cash flow input area, create a "Loan" series
    1. Set the "Date" to February 16, 2016
    2. Set the "Amount" to 5,250.00
    3. Set the "# Periods" to 1
      • Note: Since the number of periods is 1, you will not be able to set a frequency. If a frequency is set, it will be cleared when you leave the row

Frequently, the next step is to calculate the regular, periodic payment amount if you don't already know it. For this example, we'll assume that the payment has not yet been determined. If the payment has been agreed to, you can skip to step #8.

The borrower has agreed to pay the loan back in 24 equal payments due at monthly intervals. What is the payment amount?

  1. Enter known payment details in second row
    1. Set the series to "Payment"
    2. Leave the "Date" set to 03/16/2016
    3. In the "Amount" column type "U" for "Unknown"
    4. Set the number of periods to 24
    5. Set Frequency to "Monthly". (The "End Date" will be 02/16/2018)

Your screen will now look like this:

Calculate periodic payment
Calculating the periodic payment
  1. Click the "Calculate" button
    • The expected, periodic payment is $230.91
Calculated periodic payment
Expected periodic payment

Now we can start recording payments as they are received. Because we calculated the payment amount assuming 24 payments, we need to edit row #2:

  1. The 1st payment is received on time. Click on row #2
    1. Select "Payment" for the series
    2. Leave the date set to 03/16/2016
    3. In the "Amount" column enter $230.91
    4. Enter "1" for "# Periods" (recording 1 payment)

Assume the next 3 payments are also received on the due date and for the amount due but you fell behind in recording them in the calculator. It is easy to catch up:

  1. Click on row 3
    1. Select "Payment" for the series
    2. Set the date to the April 16, 2016
    3. In the "Amount" column enter $230.91
    4. Enter a "3" under "# Periods"

Your screen should now look like this:

Three scheduled payments
Three on time payments.

So far, all payments have been received for the amount due and on the due date. Let's check out the loan payoff amount after these 4 payments are made:

  1. Click on the "[Schedule]" button
    1. As of June 16, 2016, the payoff amount is $4,412.77
Loan payoff check
Payoff amount after four payments.

The borrower is reliable and not only does he pay the 5th payment early, he also pays an extra $100.

  1. Normal payment plus an extra payment. To record this:
    1. Click on the fourth row. Set the series to "Payment"
    2. Set the date to "07/10/2016"
    3. Set the "Amount" to $330.91. (Includes the extra $100.00.)
    4. Set the "# Periods" to 1

So much for the debtor being reliable.

  1. Missed payment followed by under payment:
    1. Click on the fifth row. Set series to "Payment"
    2. Set the date to "09/16/2016"
    3. Set the "Amount" to "$180.91"
    4. Set the "# Periods" to 1

After making 4 regular payments, as well as one early payment with an extra $100.00, missing a payment and making a payment that is short by $50.00, your cash flow data screen will look like this:

Five payments
An extra payment. Missed payment. And short payment.

Note: It is not necessary to enter a '0.00' for the missed payment. But it can be done as a matter of record keeping. Doing so, explicitly acknowledges that a payment was missed and it also forces the balance to be calculated on the amortization schedule as of the date of the missed payment.

Note: Interest is being calculated through 8/16/2016 and it is being added to the balance.

Your borrower is in need of additional cash. You agree to lend it to them and add it to the loan balance.

  1. Add an additional loan
    1. Click on the empty row after the last payment. This will be row six
    2. Select "Loan" for the series
    3. You will make the funds available on October 1st, 2016. Enter 10/01/2016 in the Date column
    4. In the "Amount" column enter the new loan amount $1,000.00
    5. You are making one loan. Enter a "1" for "# Periods"

Since there is a new loan amount, you want to calculate a new payment amount. Also, the borrower has agreed to pay the loan off in 18 more payments.

  1. Adjust payment due to new borrow
    1. Click on the empty row after loan just entered
    2. Select "Payment" for the Series
    3. The payments will continue to be due on the 16th of each month. Set the "Date" set to "10/16/2016"
    4. In the "Amount" column type "U" for "Unknown".
    5. Set the "# Periods" to 18
    6. Set "Frequency" to "Monthly"

Before clicking "Calculate", your screen will look like this if you've been following along:

New loan and payment adjustment
Additional loan and payment adjustment.
  1. Click "[Calculate]"
    • The new payment will be $286.78
Payment adjustment
Payment adjustment result.
  1. Next, borrower pays the full payment amount, however he does pay two days late:
    • Edit the payment in row 7.
    1. Leave "Series" set to "Payment
    2. Change the "Date" to "October 18, 2016"
    3. Since the full payment is paid, leave the amount as it is, $286.78
    4. Only one payment is being made. Change the "18" to "1" in the "# Periods" column
Resume payments
Resume entering payments
  • Continue to enter payments (and loan advances) as they are received until the loan is paid off. Remember, you may enter "0.00" payment amounts on any date to calculate the payoff as of the date entered.

Of all the financial calculators on this site, the Ultimate Financial Calculator is the most sophisticated. We hope you find using it to calculate a loan payoff is easy.