Home Loan Payout Figure Calculator

Loan Payout Formula:

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

Principal Amount (P):

Monthly Interest Rate (r):

decimal

Total Loan Term (n):

months

Payments Made (k):

months

Payout Figure (B):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is a Home Loan Payout Figure?

The home loan payout figure represents the remaining balance you would need to pay to completely settle your mortgage after making k payments. This is important when refinancing, selling your property, or making early repayments.

2. How Does the Calculator Work?

The calculator uses the loan payout formula:

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

Where:

\( B \) — Payout figure (remaining balance)
\( P \) — Original principal loan amount
\( r \) — Monthly interest rate (annual rate ÷ 12)
\( n \) — Total loan term in months
\( k \) — Number of payments already made

Explanation: The formula calculates how much principal remains after k payments by accounting for both the interest and principal components of each payment.

3. Importance of Payout Calculation

Details: Knowing your exact payout figure is crucial when refinancing or selling your home, as it determines how much you need to pay to discharge the mortgage. It also helps in financial planning for early repayments.

4. Using the Calculator

Tips:

Enter the original loan amount (principal)
Convert annual interest rate to monthly by dividing by 12 (e.g., 6% annual = 0.005 monthly)
Total term is in months (30 years = 360 months)
Payments made must be ≤ total term

5. Frequently Asked Questions (FAQ)

Q1: Why is my payout figure higher than my remaining principal?
A: The payout figure includes any outstanding interest and may include early repayment fees or other charges not accounted for in this basic calculation.

Q2: How accurate is this calculator?
A: This provides a good estimate, but your lender's exact figure may differ slightly due to specific terms, payment rounding, or fees.

Q3: Does this work for all types of loans?
A: This formula works for standard fixed-rate amortizing loans. Adjustable-rate or interest-only loans require different calculations.

Q4: What if I've made extra payments?
A: Extra payments would reduce the principal faster. This calculator assumes you've made exactly k regular payments.

Q5: How can I reduce my payout figure faster?
A: Making additional principal payments or refinancing to a lower interest rate will reduce your payout figure more quickly.