What This Calculator Does
Buying your first home means budgeting for more than just the loan. This calculator estimates your full monthly housing payment — often abbreviated PITI plus PMI — by combining your mortgage principal and interest with monthly portions of property tax, homeowner's insurance, and private mortgage insurance (PMI). Figures here use US-style dollar amounts, but the math works for any currency.
How to Use It
Enter the home price and your planned down payment. Add the interest rate (APR) and loan term in years. Then enter your annual property tax, annual home insurance premium, and annual PMI (lenders usually charge PMI when your down payment is under 20%). The calculator returns your estimated total monthly payment along with a breakdown of each component.
The Formula Explained
The loan amount is the price minus the down payment. The principal-and-interest portion uses the standard amortization formula:
$$M = \frac{L \cdot r\,(1+r)^{n}}{(1+r)^{n}-1} + \frac{\text{Tax}}{12} + \frac{\text{Insurance}}{12} + \frac{\text{PMI}}{12}$$
$$\text{where}\quad \left\{ \begin{aligned} L &= \text{Home Price} - \text{Down Payment} \\ r &= \dfrac{\text{Rate}}{1200} \\ n &= 12 \times \text{Term (yrs)} \end{aligned} \right.$$
where \(r\) is the monthly rate (APR ÷ 12 ÷ 100) and \(n\) is the total number of monthly payments (years × 12). We then add one-twelfth of your annual tax, insurance, and PMI to reach the full monthly cost.
Worked Example
Home price $300,000 with a $30,000 down payment means a $270,000 loan. At 6.5% over 30 years, the monthly rate is \(0.0054167\) and \(n = 360\). Principal & interest works out to about $1,706.58. Adding $3,600/12 = $300 tax, $1,200/12 = $100 insurance, and $1,500/12 = $125 PMI gives roughly $2,231.58 per month.
FAQ
What is PMI and can I avoid it? PMI protects the lender if your down payment is less than 20% of the price. Once you reach about 20% equity you can usually request its removal.
Why include tax and insurance? Most lenders collect these monthly in an escrow account, so they are part of your real monthly outflow even though they are not part of the loan.
Is this exact? It is an estimate. Your actual rate, tax assessment, insurance premium, HOA dues, and PMI may differ. Always confirm with a loan officer before committing.
