Mortgage Calculator with PITI

How does the Mortgage Calculator with PITI work?

PITI is principal, interest, taxes and insurance, the four parts of a typical monthly mortgage payment. Principal and interest come from the standard amortization formula. Property tax is the annual rate times the home price, divided by 12.

If the down payment is under 20% on a conventional loan, lenders usually charge private mortgage insurance (PMI), typically 0.3% to 1.5% of the loan per year, until you reach 20% equity.

For example, a $420,000 home with 20% down at 6.3% over 30 years has a $336,000 loan, a $2,080 monthly principal and interest payment, and a $2,630 full PITI payment with taxes and insurance included.

In that example, the $2,630 estimate uses a 1% annual property-tax rate ($350 per month) and $2,400 annual homeowners insurance ($200 per month). Principal and interest account for about $2,080; the remaining $550 is tax and insurance. There is no PMI at 20% down and no HOA fee.

The same $336,000 loan at 6.3% has a principal-and-interest payment of about $2,890 on a 15-year term, but total interest falls from about $412,709 over 30 years to about $184,219 over 15 years. These figures assume the rate and scheduled payments stay fixed.

PITI is not the full cost of owning a home. This estimate does not include utilities, maintenance, repairs, closing costs, or changes in tax and insurance premiums. Use your lender's loan estimate and actual local tax and insurance figures before budgeting.

PMI rules depend on the loan type and lender. The estimate applies the entered annual PMI rate to the loan balance when the down payment is below 20%; actual premiums and cancellation rules may differ.

The property-tax estimate uses the home price multiplied by your entered annual rate, then divides by 12. Actual tax bills may use assessed value rather than purchase price, and exemptions, reassessments or local levies can change the bill. Replace the default rate with a recent local tax bill when possible.

Homeowners insurance is entered as an annual premium and divided evenly across 12 months. It does not account for deductibles, separate flood coverage, or premium increases. HOA dues are added as a fixed monthly amount; they are not part of the mortgage loan or escrow.

The total-interest result covers scheduled principal-and-interest payments only. It excludes property tax, insurance, PMI, HOA dues and upfront loan costs. Extra principal payments, refinancing, missed payments or a variable-rate loan would change the actual amount paid.

Use a quoted fixed annual interest rate and compare estimates on the same term and assumptions. This calculator does not convert APR to a note rate or include discount points, lender fees, adjustable-rate changes, or government-loan insurance rules.

Sources

• CFPB: Buying a house
• CFPB: What is private mortgage insurance?