To calculate a mortgage payment, use this standard formula. M = P[r(1+r)^n] / [(1+r)^n – 1]

where:

• M = monthly mortgage payment

• P = principal loan amount

• r = monthly interest rate (annual rate ÷ 12)

• n = total number of monthly payments (loan term × 12)

Our mortgage calculator automatically uses this formula to provide accurate monthly payment estimates, including principal and interest.

PMI typically ranges from 0.3% to 1.5% of your original loan amount annually, depending on your credit score and loan-to-value (LTV) ratio.

To estimate it:

• Multiply your loan amount by your PMI rate.

• Divide the result by 12 to get your monthly PMI.

For example: $300,000 loan × 0.005 (0.5%) = $1,500 annually → $125/month PMI.

You can eliminate PMI by:

• Reaching 20% equity in your home through payments or appreciation.

• Requesting PMI cancellation in writing once your LTV drops to 80%.

• Refinancing your mortgage if your home has increased in value significantly.

• Automatic termination of PMI at 78% LTV, as required by federal law.

Yes, homeowners insurance is typically required by mortgage lenders. It protects both the lender and homeowner from financial loss due to damage, theft, or liability claims.

Your monthly mortgage payment often includes an escrow portion to cover homeowners insurance and property taxes.

Mortgage interest is usually calculated using the simple interest formula on the outstanding loan balance.

Each monthly payment includes:

• Interest for that month, based on your loan balance.

• Principal reduction, which grows as the balance decreases.

In the early years, most of your payment goes toward interest. Our calculator breaks this down for full transparency.