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CoastMath amortizes every loan one month at a time. By default, each month’s interest is one-twelfth of the annual rate on the balance (simple and daily interest are also available), and the rest of the payment reduces the principal. Payments are essential spending every year until the balance reaches zero. If you set a payoff milestone, CoastMath pays the remaining balance in one lump sum in that month.
Principal balance ($) is what you owe today. Interest rate (% per year) is the annual rate. Payment type sets how the monthly payment is determined:
- Fixed: a level payment. Enter Monthly payment ($), or leave it blank and enter Remaining term (months). CoastMath then calculates the payment that retires today’s balance over that term and saves it rounded to the cent. If you enter both, the payment you entered is used.
- Percent of balance: each month’s payment is a fraction of that month’s balance, for example 0.02 for 2%. The payment shrinks as the balance falls.
- Custom: a fixed monthly amount with no term.
Level monthly payment=Balance×r × (1 + r)n(1 + r)n − 1
r is the annual rate ÷ 12 and n is the months remaining. Used for a Fixed loan when you enter a term but no payment. With a 0% rate, it is the balance divided by the number of months.
| Monthly payment | $1,798.65 | |
|---|---|---|
| − | Interest: $300,000 × 6% ÷ 12 | $1,500.00 |
| = | Principal repaid | $298.65 |
Interest is charged on the balance that remains, so each payment leaves a slightly smaller balance and next month’s interest is a little lower. The payment stays the same, so more of it goes to principal each month. Early on, most of the payment is interest. Near the end, almost all of it is principal.
- Interest
- Principal
The yearly total is $21,584 throughout ($1,798.65 × 12).
Show data
| Loan year | Interest | Principal |
|---|---|---|
| 1 | $17,900 | $3,684 |
| 2 | $17,673 | $3,911 |
| 3 | $17,431 | $4,152 |
| 4 | $17,175 | $4,409 |
| 5 | $16,903 | $4,681 |
| 6 | $16,615 | $4,969 |
| 7 | $16,308 | $5,276 |
| 8 | $15,983 | $5,601 |
| 9 | $15,637 | $5,947 |
| 10 | $15,271 | $6,313 |
| 11 | $14,881 | $6,703 |
| 12 | $14,468 | $7,116 |
| 13 | $14,029 | $7,555 |
| 14 | $13,563 | $8,021 |
| 15 | $13,068 | $8,516 |
| 16 | $12,543 | $9,041 |
| 17 | $11,985 | $9,599 |
| 18 | $11,393 | $10,191 |
| 19 | $10,765 | $10,819 |
| 20 | $10,097 | $11,486 |
| 21 | $9,389 | $12,195 |
| 22 | $8,637 | $12,947 |
| 23 | $7,838 | $13,746 |
| 24 | $6,990 | $14,593 |
| 25 | $6,090 | $15,493 |
| 26 | $5,135 | $16,449 |
| 27 | $4,120 | $17,464 |
| 28 | $3,043 | $18,541 |
| 29 | $1,900 | $19,684 |
| 30 | $685 | $20,898 |
If a payment is smaller than the month’s interest, the unpaid interest is added to the balance, and the debt grows. Only the payment itself counts as money spent. If the plan starts partway through a year, the first year includes only the remaining months.
Interest method sets how interest accrues. Payments, the payoff date and the interest paid all follow it.
- Monthly amortization (the default): interest is one-twelfth of the annual rate on the balance each month. If a payment doesn’t cover the month’s interest, the unpaid part is added to the balance and earns interest.
- Simple interest on principal: interest is one-twelfth of the annual rate on the principal only. Unpaid interest is still owed and counts as debt, but it never earns interest; each payment covers it before any principal. When payments always cover the interest, the schedule matches monthly amortization.
- Daily accrual (actual/365): interest compounds every day at the annual rate ÷ 365 over each calendar month’s actual days, so a 31-day month costs more than February. A Fixed loan entered with a term gets the level payment for an average month of daily compounding, which is slightly higher than the monthly-amortization payment.
| Interest on principal: $10,000 × 12% ÷ 12 × 12 months | $1,200 | |
|---|---|---|
| − | Payments: $50 × 12 | $600 |
| = | Unpaid simple interest owed at year endThe principal stays $10,000; with monthly amortization the unpaid interest would compound into the balance instead. | $600 |
A loan you take out again and again, such as a car loan every 7 years, can repeat. Set Take it again every (years) under Repeat this loan. In January of every that many years after the plan start, CoastMath adds a new loan with the same balance, payment, extra payment, rate, interest method and offset account, in today’s dollars grown with inflation to that year. Each repeat is a separate loan, so it can overlap the one before it if that loan is not yet paid off.
Repeats stop after the Last repeat year or once the Stop repeating at milestone milestone is reached; a milestone reached later in a year still lets that January’s repeat start. Without either, the loan repeats until the plan ends.
Extra payment ($/year, spread monthly) is an annual amount. CoastMath divides it by 12 and adds it to every monthly payment, so all of it goes to principal. The loan ends sooner and less interest is charged. After the last payment, the money that went to the loan becomes surplus, which your Direct surplus into accounts direct into accounts.
| Total interest, scheduled payments onlyThe 30-year schedule | $347,516 | |
|---|---|---|
| − | Total interest with the extra paymentPaid off after 17 years and 8 months | $187,220 |
| = | Interest avoided | $160,296 |
A Payoff milestone pays the loan off in the month that milestone takes effect. Regular payments continue until that month. Then the remaining balance is paid as a lump sum, and no further payments are made. The lump sum is essential spending: it is paid from that year’s income first, then from withdrawals in your withdrawal order. You can’t choose a separate source account for it.
The month depends on the milestone’s type (see Milestones and event timing):
- Age milestones take effect in your birth month.
- Date milestones take effect in the month of their date.
- Net-worth and financial independence milestones take effect in January. With one of these, CoastMath pays off the whole balance at the start of the year, with no regular payments.
| Six scheduled payments, January–June$8,746.73 interest and $2,045.17 principal | $10,791.90 | |
|---|---|---|
| + | Balance paid off in July | $290,359.57 |
| = | Loan payments in 2028 | $301,151.47 |
The payoff year shows one large loan payment. From 2029 on, the loan has no payments.
Selling a property also pays off every loan linked to it; see Selling a home or property.
A lender can cancel part or all of a loan. On the loan’s form, choose Part or all of this loan is forgiven once, then pick a calendar year or a milestone. Leave Amount forgiven blank to forgive whatever balance remains, including unpaid simple interest, or enter a smaller amount. The event runs once, at the start of that year. No cash arrives: the balance simply drops, and later payments and interest follow the lower balance.
Forgiven debt is taxable income by default, added to that year’s ordinary income. An exclusion applies only when you declare one: choose I declare an exclusion, pick the basis and, optionally, the excluded amount. CoastMath records what you declare. It does not decide whether you qualify, so confirm an exclusion with a tax professional first.
| Balance forgiven | $40,000 | |
|---|---|---|
| − | Amount you declare excluded | $15,000 |
| = | Added to that year’s ordinary income | $25,000 |
With the default treatment and no exclusion, the whole $40,000 is added to income.
- A milestone that is already reached when the plan starts, or never reached, does not trigger forgiveness. A start-of-plan warning says so.
- If the loan is already paid off, or the forgiveness year is before the plan starts, nothing happens.
- Forgiven interest is taxed with the forgiven principal; the exclusion for interest that would have been deductible isn’t modeled.
If you choose an Offset account, interest is charged only on the part of the loan balance that exceeds that account’s balance. The account keeps its money. Because the payment stays the same while the interest falls, more of each payment goes to principal. If the account holds at least as much as you owe, no interest is charged.
CoastMath uses one offset balance for the whole year. That balance includes the year’s investment growth but not the surplus saved into the account that year.
Interest on a loan whose Linked real asset is marked Primary residence counts as mortgage interest. You get a deduction for it only if you itemize (see Itemized deductions). Interest on any other loan is never deducted: a second-home mortgage, a car loan, a student loan or unsecured debt. The deduction counts only interest that was actually paid. Interest added to the balance isn’t included.
Each year’s payments appear in the cash-flow view as one essential expense per loan, under the loan’s name. In net worth, the remaining balance is subtracted. Show amortization schedule lists each loan year from the plan start.