Mortgage Calculator

PITI stands for Principal, Interest, Taxes, and Insurance, which are the four main components of a typical mortgage payment. Principal is the amount that goes toward paying off your original loan balance. Interest is the cost of borrowing the money, calculated as a percentage of your remaining loan balance. Taxes refer to property taxes collected by local governments, typically based on the assessed value of your home. Insurance includes homeowners insurance, which protects against damage to your property, and possibly private mortgage insurance (PMI) if your down payment is less than 20%. Our mortgage calculator provides a breakdown of each of these components so you can see exactly where your monthly payment is going.

Your down payment affects your mortgage in several important ways: 1) It directly reduces your loan amount, which lowers your monthly payments and total interest paid over the life of the loan; 2) A down payment of 20% or more typically allows you to avoid private mortgage insurance (PMI), which can save you hundreds of dollars per month; 3) Larger down payments often qualify you for better interest rates, as they reduce the lender's risk; 4) The size of your down payment affects your loan-to-value ratio (LTV), which is a key factor in loan approval and terms. Our calculator allows you to adjust your down payment amount and instantly see how it affects your monthly payment, including whether PMI would be required, helping you find the optimal balance between upfront costs and long-term affordability.

The property tax and insurance estimates in our calculator are based on national averages and should be considered starting points for your calculations. Property taxes vary significantly by location, with different states, counties, and municipalities having their own tax rates and assessment methods. Similarly, homeowners insurance costs depend on factors such as your home's location, size, construction, and coverage levels. For the most accurate estimates, we recommend researching the property tax rates in your specific area (often available on county assessor websites) and obtaining actual insurance quotes from multiple providers. You can then enter these specific values into our calculator to get a more personalized and accurate monthly payment projection.

Private Mortgage Insurance (PMI) is an insurance policy that protects the lender if you default on your mortgage payments. PMI is typically required when you purchase a home with a down payment of less than 20% of the purchase price. The cost of PMI usually ranges from 0.3% to 1.5% of your loan amount annually, depending on your credit score, down payment size, and loan term. Our calculator automatically includes PMI estimates when your down payment is below 20%, showing you the additional cost in your monthly payment. Once you've built up 20% equity in your home (either through appreciation or loan principal reduction), you can usually request to have PMI removed. In most cases, PMI will automatically terminate when your loan balance reaches 78% of the original purchase price.