The mortgage calculator allows you to estimate your monthly payment by including principal, interest, property taxes, private mortgage insurance (PMI), homeowner’s insurance, and HOA fees.
Mortgage Calculation Considerations :
Down Payment vs. Loan Amount
The down payment is the difference between the home’s purchase price and the mortgage amount. For refinancing, it reflects the equity you hold in your property.
Private Mortgage Insurance (PMI)
PMI applies if your down payment is less than 20% of the property’s value, i.e., when the loan-to-value (LTV) ratio exceeds 80%. PMI is eliminated once the loan balance drops to 80% or less of the home’s value. Typical PMI rates include:
- 95.01-100% LTV: 1.03%
- 90.01-95% LTV: 0.875%
- 85.01-90% LTV: 0.625%
- 80.01-85% LTV: 0.375%
Actual PMI rates vary based on factors such as LTV, credit score, and debt-to-income ratio.
Property Tax & Insurance Payments
Although property taxes and insurance are often paid annually, they are included in the monthly payment for budgeting purposes, assuming these amounts are set aside monthly (e.g., via escrow accounts).
