How to Calculate Your Mortgage Payment
Enter your home price and down payment to determine the loan principal. Add your interest rate and loan term. Include annual property tax and home insurance for a complete PITI estimate. If your down payment is less than 20%, PMI is automatically added.
Understanding Your Mortgage Payment
A mortgage payment typically consists of four parts: Principal, Interest, Taxes, and Insurance. When your down payment is below 20%, lenders usually require Private Mortgage Insurance (PMI), typically around 0.5% of the loan annually.
FAQ
What is PMI?
Private Mortgage Insurance protects the lender if you default. It is required when your down payment is less than 20% of the home price.
How is the monthly payment calculated?
The P&I payment uses the standard amortization formula: M = P * r * (1+r)^n / ((1+r)^n - 1).