1. What is a Mortgage Refinance Calculator With PMI?

Definition: This calculator estimates your total monthly mortgage payment when refinancing, including both principal/interest and Private Mortgage Insurance (PMI).

Purpose: It helps homeowners evaluate refinancing options by showing the complete monthly payment including PMI costs.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( M_{total} \) — Total monthly payment (USD)
• \( P \) — Loan principal (USD)
• \( r \) — Monthly interest rate (decimal)
• \( n \) — Total number of payments
• \( pmi_{rate} \) — Annual PMI rate (decimal)

Explanation: The first part calculates the standard mortgage payment, while the second part adds the monthly PMI cost.

3. Importance of PMI in Refinancing

Details: PMI is typically required when refinancing with less than 20% equity. Including it in calculations gives a complete picture of monthly costs.

4. Using the Calculator

Tips: Enter the loan amount, interest rate, loan term (years), and PMI rate (annual percentage). The calculator provides the complete monthly payment.

5. Frequently Asked Questions (FAQ)

Q1: What is PMI and when is it required?
A: Private Mortgage Insurance protects lenders when borrowers have less than 20% equity. It's typically required for LTV ratios above 80%.

Q2: What's a typical PMI rate?
A: PMI rates usually range from 0.5% to 1.5% of the loan amount annually, depending on credit score and LTV ratio.

Q3: Can I remove PMI after refinancing?
A: Yes, once you reach 20% equity through payments or home value appreciation, you can request PMI removal.

Q4: How does PMI affect refinancing decisions?
A: PMI increases monthly costs, which may affect whether refinancing makes financial sense compared to your current loan.

Q5: Does this calculator include taxes and insurance?
A: No, this calculates only principal, interest, and PMI. Property taxes and homeowners insurance would be additional.