Calculate your estimated monthly mortgage payment, including Principal, Interest, Taxes, Insurance, and Private Mortgage Insurance (PMI).
Mortgage Payment Calculator
Enter the total price of the home.
Enter the amount you plan to pay upfront.
15 Years
20 Years
25 Years
30 Years
40 Years
Select the duration of your loan.
Enter the yearly interest rate for your mortgage.
Estimated yearly property tax amount.
Estimated yearly homeowner's insurance premium.
Private Mortgage Insurance rate (often required if down payment < 20%).
Your Estimated Monthly Mortgage Payment
Estimated Total Monthly Payment (PITI + PMI)$0.00
Principal & Interest (P&I)$0.00
Monthly Property Taxes (T)$0.00
Monthly Home Insurance (I)$0.00
Monthly PMI$0.00
This calculation estimates your total monthly housing cost. P&I is calculated using the loan amortization formula. T, I, and PMI are estimates based on your annual inputs divided by 12.
Loan Amortization Schedule (First 12 Months)
Monthly breakdown for the first 12 months of your loan.
Month
Starting Balance
Payment (P&I)
Principal Paid
Interest Paid
Ending Balance
Monthly Payment Breakdown
What is a Mortgage Payment with PMI?
A mortgage payment with PMI, commonly referred to as PITI + PMI, is the comprehensive monthly cost associated with owning a home when you haven't met the typical 20% down payment threshold. PITI stands for Principal, Interest, Taxes, and Insurance. Private Mortgage Insurance (PMI) is an additional insurance premium paid by borrowers who put down less than 20% of the home's purchase price on a conventional loan. It protects the lender in case the borrower defaults on the loan. Understanding this total monthly outlay is crucial for budgeting and financial planning.
Who should use this calculator?
Anyone looking to purchase a home with a down payment of less than 20% on a conventional loan will benefit from this mortgage calculator with PMI. It's also useful for existing homeowners considering refinancing and wanting to estimate their new payment, especially if they'll still be subject to PMI. First-time homebuyers will find it particularly valuable for understanding the full scope of their future monthly expenses.
Common Misconceptions:
One common misconception is that PMI is a one-time fee. In reality, PMI is a recurring monthly expense. Another is that PMI automatically stops once you've paid a certain percentage of the loan; while there are rules for cancellation (typically when loan-to-value reaches 80% or through specific refinance processes), it doesn't always cease automatically. Some also mistakenly believe PMI is the same as Homeowner's Association (HOA) fees or title insurance, which are separate costs.
Mortgage Payment with PMI Formula and Mathematical Explanation
Calculating your total monthly mortgage payment involves several components. The core of this is the Principal and Interest (P&I) payment, followed by the addition of monthly estimates for Property Taxes (T), Homeowner's Insurance (I), and Private Mortgage Insurance (PMI).
1. Principal and Interest (P&I) Calculation:
This is calculated using the standard mortgage payment formula for an amortizing loan:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment (P&I only)
P = The principal loan amount (Home Price – Down Payment Amount)
i = Your monthly interest rate (Annual Interest Rate / 12 / 100)
n = The total number of payments (Loan Term in Years * 12)
2. Monthly Property Taxes (T):
This is a straightforward division of your annual estimate:
Monthly T = Annual Property Taxes / 12
3. Monthly Homeowner's Insurance (I):
Similarly, this is your annual estimate divided by 12:
Monthly I = Annual Homeowner's Insurance / 12
4. Monthly Private Mortgage Insurance (PMI):
PMI is typically calculated as a percentage of the loan amount annually, then divided by 12:
Monthly PMI = (Loan Amount * PMI Rate) / 12
5. Total Monthly Payment (PITI + PMI):
This is the sum of all the above components:
Total Monthly Payment = M + Monthly T + Monthly I + Monthly PMI
Variable Explanations:
Variable
Meaning
Unit
Typical Range
P (Principal Loan Amount)
The amount borrowed after the down payment.
Currency ($)
$50,000 – $1,000,000+
i (Monthly Interest Rate)
The cost of borrowing money, expressed monthly.
Decimal (e.g., 0.005417 for 6.5% / 12)
0.002083 (2.5% / 12) – 0.008333 (10% / 12)
n (Number of Payments)
Total number of monthly payments over the loan term.
Integer
180 (15 yrs) – 480 (40 yrs)
Annual Interest Rate
The yearly percentage charged by the lender.
Percentage (%)
3% – 10%+
Loan Term (Years)
Duration of the loan.
Years
15, 20, 25, 30, 40
Annual Property Taxes
Taxes levied by local government based on property value.
Currency ($)
$1,000 – $10,000+
Annual Home Insurance
Cost to insure the property against damage/loss.
Currency ($)
$500 – $3,000+
PMI Rate
Annual percentage charged for PMI.
Percentage (%)
0.2% – 1.5%
Practical Examples (Real-World Use Cases)
Let's illustrate with two distinct scenarios to show how the mortgage calculator with PMI works.
Example 1: First-Time Homebuyer with Moderate Down Payment
Sarah is buying her first home. The purchase price is $350,000. She has saved $50,000 for a down payment, which is 14.3% of the purchase price. Her lender offers an annual interest rate of 7.0% for a 30-year loan. She estimates her annual property taxes at $4,200 and annual homeowner's insurance at $1,500. Since her down payment is less than 20%, she'll need PMI, and her lender quotes a rate of 0.75% annually.
Inputs:
Home Purchase Price: $350,000
Down Payment Amount: $50,000
Loan Term: 30 Years
Annual Interest Rate: 7.0%
Annual Property Taxes: $4,200
Annual Home Insurance: $1,500
PMI Rate: 0.75%
Calculator Output (Estimated):
Loan Amount (P): $300,000
Monthly P&I (M): ~$1,996.03
Monthly Taxes (T): $350.00 ($4,200 / 12)
Monthly Insurance (I): $125.00 ($1,500 / 12)
Monthly PMI: ~$187.50 ($300,000 * 0.0075 / 12)
Total Monthly Payment (PITI + PMI): ~$2,658.53
Financial Interpretation: Sarah needs to ensure she can comfortably afford a total monthly housing payment of approximately $2,658.53. This includes not just her loan repayment but also the ongoing costs of taxes, insurance, and the PMI premium. She should also factor in potential increases in taxes and insurance premiums over time.
Example 2: Refinancing with PMI Requirement
John and Lisa are refinancing their home. Their current loan balance is $250,000. They plan to put down an additional $10,000 from savings to reduce their loan amount further, making the new loan $240,000. They are opting for a 20-year term with an interest rate of 6.0%. Their annual property taxes are $3,600, and annual insurance is $1,300. Because their new loan-to-value ratio (after considering the new down payment relative to the *current* value, which we'll assume is still $300,000 for this example) is 80% ($240,000 / $300,000), they might still require PMI, let's assume a rate of 0.5%.
Inputs:
Home Purchase Price (Effective New Loan Value): $300,000 (for LTV context)
Down Payment Amount (Applied to New Loan): $10,000
Loan Amount (P): $240,000 (calculated as $250k current balance – $10k applied)
Loan Term: 20 Years
Annual Interest Rate: 6.0%
Annual Property Taxes: $3,600
Annual Home Insurance: $1,300
PMI Rate: 0.5%
Note: For refinancing, the "Home Purchase Price" input in the calculator would effectively be the *current appraised value* of the home if applying a down payment to reduce the loan. Here, we've set the effective loan amount directly.
Calculator Output (Estimated):
Loan Amount (P): $240,000
Monthly P&I (M): ~$1,591.58
Monthly Taxes (T): $300.00 ($3,600 / 12)
Monthly Insurance (I): $108.33 ($1,300 / 12)
Monthly PMI: ~$100.00 ($240,000 * 0.005 / 12)
Total Monthly Payment (PITI + PMI): ~$2,100.00
Financial Interpretation: John and Lisa's new total monthly housing cost is estimated at $2,100. This refinance could potentially lower their monthly payment compared to their previous situation, but they need to confirm the PMI requirement and its duration. They should also consider closing costs associated with refinancing. You can explore refinance calculators for a more detailed comparison.
How to Use This Mortgage Calculator with PMI
Using our mortgage calculator with PMI is designed to be straightforward. Follow these steps to get an accurate estimate of your monthly housing expenses.
Enter Home Purchase Price: Input the total agreed-upon price for the property.
Enter Down Payment Amount: Specify the lump sum you intend to pay upfront. If your down payment is less than 20% of the purchase price, you'll likely incur PMI.
Select Loan Term: Choose the duration (in years) over which you'll repay the loan (e.g., 15, 20, 30 years). Longer terms generally mean lower monthly payments but more interest paid overall.
Enter Annual Interest Rate: Input the yearly interest rate offered by your lender. This is a critical factor in your monthly payment.
Enter Annual Property Taxes: Provide your best estimate of the total property taxes you expect to pay annually. This varies significantly by location.
Enter Annual Homeowner's Insurance: Input the estimated annual cost for your homeowner's insurance policy.
Enter PMI Rate: If your down payment is less than 20%, enter the annual PMI rate as a percentage. Lenders often determine this based on your credit score and loan-to-value ratio. If your down payment is 20% or more, you can often leave this at 0 or simply not enter a value if the input is optional.
Click "Calculate Payments": The calculator will process your inputs and display the estimated monthly P&I, T, I, and PMI.
How to Read Results:
The primary highlighted result shows your Total Estimated Monthly Payment (PITI + PMI). Below this, you'll find the breakdown: Principal & Interest (P&I), Monthly Taxes (T), Monthly Insurance (I), and Monthly PMI. The amortization table shows how each P&I payment is divided between principal and interest over the loan's life, starting with the first 12 months. The chart visually represents the proportion of your total monthly PITI + PMI payment allocated to each component.
Decision-Making Guidance:
Use these results to assess affordability. Can you comfortably manage the total monthly payment within your budget? Consider the impact of PMI – is it significantly increasing your payment? If so, explore options to increase your down payment or strategies for PMI removal later. Compare this estimate to your current rent or previous mortgage payment. Understanding these figures is vital for making an informed home buying decision.
Key Factors That Affect Mortgage Payment Results
Several variables significantly influence your total monthly mortgage payment and the overall cost of your loan. Understanding these factors is key to navigating the mortgage process.
Loan Principal Amount: This is the most direct factor. A larger loan amount (resulting from a lower down payment or higher home price) naturally leads to a higher monthly P&I payment and potentially higher PMI.
Interest Rate: The annual interest rate is a powerful determinant of your monthly P&I payment and the total interest paid over the loan's life. Even a small difference in the interest rate can lead to substantial changes in your monthly obligation and long-term costs. This rate is influenced by market conditions, your creditworthiness, and the loan type.
Loan Term: A longer loan term (e.g., 30 years vs. 15 years) results in lower monthly P&I payments because the principal is spread over more payments. However, you'll pay significantly more interest over the life of the loan. A shorter term means higher monthly payments but less total interest paid.
Down Payment Percentage: A larger down payment directly reduces the loan principal. Critically, it can also eliminate the need for PMI if it reaches the 20% threshold for conventional loans, significantly lowering your monthly payment.
Property Taxes: These are a major component of your monthly housing cost (the 'T' in PITI). They are set by local governments and can vary dramatically by location. Higher property taxes mean a higher monthly payment. Many mortgage affordability calculators will help you estimate this based on location.
Homeowner's Insurance Premiums: The cost of insuring your home against damage, theft, and liability affects the 'I' in PITI. Premiums depend on factors like the home's age, construction materials, location (e.g., flood or hurricane zones), and desired coverage level.
PMI Rate and Loan-to-Value (LTV): For borrowers with less than 20% down, the PMI rate is crucial. Higher rates increase the monthly payment. Lenders typically assess PMI based on the LTV ratio (loan amount divided by home value) and your credit score. As you build equity, PMI can eventually be removed, lowering your housing costs.
Private Mortgage Insurance (PMI) Cancellation: The rules for PMI cancellation are important. Generally, once your LTV drops to 80%, you can request PMI removal. At 78% LTV, it's legally required to be automatically terminated on most conventional loans. Understanding these thresholds helps plan for future cost reductions.
Frequently Asked Questions (FAQ)
What is the difference between PMI and homeowner's insurance?
PMI protects the lender if you default on your loan when your down payment is less than 20%. Homeowner's insurance protects you (and the lender) against damage to your property and liability claims. They serve entirely different purposes.
How do I get rid of PMI?
You can typically request PMI cancellation once your loan-to-value (LTV) ratio reaches 80%. It is automatically canceled by law once the LTV reaches 78% on most conventional loans, provided you are current on your payments. Building equity through principal payments or home appreciation can help reach these thresholds.
Can I use this calculator if my down payment is 20% or more?
Yes! If your down payment is 20% or more, you generally won't need to pay PMI. Simply enter your down payment amount, and you can set the PMI Rate to 0% or leave it blank if the calculator allows. The PMI calculation will then be $0. The rest of the PITI calculation remains relevant.
Are property taxes and homeowner's insurance escrowed?
Often, yes. Lenders usually require you to pay these amounts monthly into an escrow account, which they then use to pay your property tax bills and homeowner's insurance premiums when they are due. This ensures these critical payments are made on time. Your total monthly mortgage payment (what you pay the lender) includes these escrowed amounts.
Does this calculator include HOA fees?
No, this mortgage calculator with PMI does not include Homeowner's Association (HOA) fees. HOA fees are separate monthly or annual charges paid directly to a homeowners' association for the maintenance of common areas and amenities. They are an additional cost of homeownership to consider.
What is an FHA loan, and do they have PMI?
FHA loans are government-backed mortgages designed for borrowers with lower credit scores or smaller down payments. They do not have PMI; instead, they have a Mortgage Insurance Premium (MIP) which is structured differently (often paid upfront and annually). This calculator is primarily for conventional loans requiring PMI.
How accurate are these estimates?
The estimates provided by this mortgage calculator with PMI are based on the formulas and inputs you provide. They are highly accurate for the Principal, Interest, Taxes, Insurance, and PMI components *if your inputs are accurate*. However, actual lender rates, specific insurance policy costs, and local tax assessments may vary. It's always best to get official Loan Estimates from lenders for precise figures.
What if my interest rate changes? How does that affect my payment?
If you have an adjustable-rate mortgage (ARM), your interest rate can change periodically, affecting your monthly P&I payment. This calculator assumes a fixed-rate mortgage. For ARMs, the initial payment is calculated based on the starting rate, but future payments could be higher or lower depending on market conditions and the specific terms of your ARM.