Mortgage Calculator with Taxes, Insurance & PMI

#What goes into a mortgage payment (PITI)

Lenders talk about PITI: principal, interest, taxes and insurance. Most buyers pay all four in one monthly bill, with the tax and insurance held in an escrow account.

• Principal and interest come from the standard amortization formula. On a fixed-rate loan this part never changes.
• Property tax is set locally. Nationally it averages roughly 1% of a home's value a year, but it ranges from well under 0.5% in states like Hawaii to more than 2% in New Jersey and Illinois.
• Homeowners insurance has risen fast in storm- and wildfire-prone states. Get a real quote before you make an offer.
• PMI (private mortgage insurance) is usually charged on conventional loans with less than 20% down — typically about 0.3% to 1.5% of the loan a year, depending on your credit score and down payment.
• HOA dues apply to many condos and planned communities.

Example: A $400,000 home with 20% down at 6.5% for 30 years has principal and interest of about $2,023 a month. Add 1% property tax ($333) and $2,000 a year of insurance ($167) and the payment is about $2,523 — before any HOA.

#How much house can you afford?

Many lenders use the 28/36 rule: housing costs (PITI) under 28% of gross monthly income, and all debt payments under 36%. The calculator shows the income you would need to keep this payment at 28%. Some loan programs allow higher ratios, but a payment you can carry through a job loss or a big repair is worth more than the largest loan you can get.

Tip: Your credit score changes your rate more than almost anything else. See how FICO scores work and keep an emergency fund separate from your down payment.

#15-year vs 30-year

A 15-year mortgage usually has a lower rate and saves a large amount of interest, but the monthly payment is much higher. On a $320,000 loan, moving from 30 years at 6.5% to 15 years at about 5.75% raises principal and interest from about $2,023 to roughly $2,657 a month — but cuts total interest from about $408,000 to around $158,000. If the higher payment is a stretch, take the 30-year loan and make extra principal payments when you can.

#When PMI goes away

Under the federal Homeowners Protection Act, you can ask your lender to cancel PMI once your balance reaches 80% of the home's original value, and it must end automatically at 78% if you are current on payments. FHA loans work differently: their mortgage insurance often lasts for the life of the loan unless you put at least 10% down.

#Frequently asked questions

Does the calculator include closing costs?

No. Closing costs are paid upfront and commonly run about 2% to 5% of the loan amount. Budget for them on top of your down payment.

Why is my lender's payment different?

Your lender uses your exact property tax bill, insurance quote, PMI rate and any escrow cushion. Treat this calculator as a close estimate and the Loan Estimate form as the final number.

Is it better to put 20% down?

Putting 20% down avoids PMI and lowers your payment, but it is not required. Many buyers put 5–10% down and pay PMI for a few years rather than wait. Don't drain your emergency savings to reach 20%.

What is a good mortgage rate right now?

Rates change daily. Check a few lenders on the same day and compare the APR, not just the rate, because APR includes points and fees.

#Sources

• Consumer Financial Protection Bureau — Owning a home
• CFPB — When can I remove PMI?
• Freddie Mac — Primary Mortgage Market Survey