Total Mortgage Payment Formula:
From: | To: |
Definition: This calculator estimates your total monthly mortgage payment including principal, interest, and Private Mortgage Insurance (PMI).
Purpose: It helps homebuyers understand their full monthly housing costs when making less than a 20% down payment.
The calculator uses the formula:
Where:
Explanation: The calculator first determines your principal and interest payment, then adds PMI if your down payment is less than 20%.
Details: PMI can add significant cost to your mortgage. Understanding this helps with budgeting and deciding whether to make a larger down payment.
Tips: Enter the loan amount, interest rate, loan term (years), and down payment percentage. The calculator will show your PI payment, PMI (if applicable), and total payment.
Q1: What is PMI and when is it required?
A: PMI is insurance that protects lenders when borrowers make down payments less than 20%. It's typically required for conventional loans with less than 20% down.
Q2: How much does PMI cost?
A: PMI typically costs 0.5% to 1.5% of the loan amount annually. Our calculator uses 0.85% as a default for loans with less than 20% down.
Q3: How can I avoid PMI?
A: Make a down payment of 20% or more, or consider lender-paid mortgage insurance or piggyback loans.
Q4: How long do I have to pay PMI?
A: For conventional loans, PMI automatically cancels when you reach 22% equity, but you can request cancellation at 20% equity.
Q5: Does this calculator include taxes and insurance?
A: No, this calculates only principal, interest, and PMI. Your actual payment may include property taxes and homeowners insurance.