1. What is a Mortgage Calculator with PMI?

Definition: This calculator estimates your total monthly mortgage payment including Principal, Interest, and Private Mortgage Insurance (PMI).

Purpose: It helps homebuyers understand their complete monthly housing costs when making less than a 20% down payment.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( M_{total} \) — Total monthly payment (USD)
• \( M \) — Base mortgage payment (principal + interest)
• \( PMI \) — Private Mortgage Insurance payment

Explanation: The base mortgage is calculated using standard amortization formulas, then PMI is added based on the loan amount and PMI rate.

3. Importance of PMI Calculation

Details: PMI is typically required for conventional loans with less than 20% down payment, adding 0.5%-1.5% of the loan amount annually.

4. Using the Calculator

Tips: Enter the loan amount, interest rate (annual), loan term in years, and PMI rate (annual percentage). Default PMI rate is 0.5%.

5. Frequently Asked Questions (FAQ)

Q1: What is PMI and why do I need it?
A: PMI protects lenders when borrowers make small down payments. It's typically required for down payments less than 20%.

Q2: How long do I pay PMI?
A: Usually until your loan-to-value ratio reaches 78%, but rules vary by lender and loan type.

Q3: Can I avoid PMI?
A: Yes, by making a 20% down payment, using lender-paid MI, or getting a piggyback loan.

Q4: Does this include property taxes and insurance?
A: No, this calculator only shows principal, interest, and PMI. Your actual payment may include escrow items.

Q5: How accurate is this calculator?
A: It provides estimates. Actual payments may vary based on lender fees, exact PMI rates, and other factors.