How do you calc remaining length of mortgage with extra principal payments?

mortgage

I don't know of any formula, but when I wanted to figure this out I set up a simple spreadsheet like this:

Payment Amt.

------------------------------------------- Month 1 | Month 2

------------------------------------------- Prin. Balance | Prin. Bal. | = Month1 Prin. Bal. + Month1 Interest | - Month1 Payment Amt.

--------------------------------------------------- Interest due |Interest =((rate/12)*Prin. Bal.)|((rate/12)*Month2 Prin. Bal.

---------------------------------------------------- Payment Amt. |Payment Amt.

Block and copy the monthly group of cells out to month 360, or whatever, and then experiment with plugging in different Payment Amounts and seeing when the Prin. Bal. goes to zero. Its not elegant, but its quick and easy.

Andy

Not exactly what you're looking for, but here's a slightly different way that's easier to track:

Just look at your amortization schedule, and add next months' principal to the present month's payment. (This will be slightly more than your present month's principal.) Then you've made your payment for the next month as well.

In other words -- to January's payment, add february's principal. Then in February, make March's payment and add April's principal to it, etc, etc etc. That way you're making, in effect, two monthly payments every month and you can easily see how much proncipal is left on the loan.

That's what I do. I actually add a few months principal to each month's payment. It's affordable now, since I'm only 4 years into my 30 year mortgage. As the principal portion of the payment increases, I will eventually have to scale that back to just one extra month's principal then to no extar principal. But I'll end up paying off my mortgage at least 10 years early using this method.

Two caveats -- 1. Make sure that the mortgagee knows that the extra payment is all principal, and 2. as you progress, paying the extra months proncipal will get more expensive as the ratio between interest and principal changes -- but that would also be the case with what you're asking.

This is another reason I love my MS Money program, the calculators are all built in. But if you don't have it, you might try going to this site and downloading one of the spreadsheets and play with it. Good luck!

In Excel use the NPER(Rate, pmt, pv,fv,type). This returns the number of periods give the interest rate, payment and present value. payment and interest rate should be per month and the answer will be months.

Here is the mathematical formula:

n = -Log[1 - A*i / P] / Log[1 + i]

n = number of payments remaining A = current balance i = interest rate per payment period expressed as decimal P = payment (principal + interest, not escrow, etc.)

Darryl