Monthly Payment Formula (including PMI):
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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 they can't make a 20% down payment.
The calculator uses the formula:
Where:
Explanation: The first part calculates the standard mortgage payment, while the second part adds the PMI cost.
Details: PMI typically costs 0.5%-1.5% of the loan annually and is required for loans with less than 20% down payment.
Tips: Enter your loan amount, interest rate, loan term, and PMI rate. The calculator shows your total payment plus the breakdown.
Q1: How long do I pay PMI?
A: Typically until you reach 20% equity in your home, either through payments or appreciation.
Q2: Can I avoid PMI?
A: Yes, with a 20% down payment, lender-paid MI (higher rate), or piggyback loans (80-10-10 structure).
Q3: Does PMI vary by credit score?
A: Yes, borrowers with higher scores generally get lower PMI rates.
Q4: Is PMI tax deductible?
A: For some borrowers (AGI below $100k), consult a tax professional.
Q5: How accurate is this calculator?
A: It provides estimates; actual payments may include taxes/insurance which aren't calculated here.