Mortgage payment calculator

Work out the monthly payment on a fixed-rate mortgage — principal, interest, and PMI — and see the month PMI actually drops off. Most calculators treat PMI as if it lasts forever. It doesn't.

How the math works

The monthly payment is the standard fixed-rate amortization formula. It solves for the constant payment that clears the loan over the term, given a fixed monthly rate.

Where M is the monthly principal-and-interest payment, P is the loan amount (price minus down payment), i is the monthly rate (annual APR divided by 12), and n is the number of payments (years times 12). Property tax and insurance, if you enter them, are added on top as flat monthly amounts.

PMI is a separate line. Private mortgage insurance is charged monthly while your loan-to-value ratio sits above 80%, and it runs 0.46% to 1.50% of the loan amount per year depending on credit and down payment. The part most calculators leave out is when it stops. Under the Homeowners Protection Act, you can request cancellation once the balance is scheduled to hit 80% of the home's original value, and the servicer must terminate it automatically at 78%. To find those months, the calculator amortizes the loan month by month and watches the balance cross each threshold.

Worked example

Take a $360,000 purchase with 10% down — a $324,000 loan at the 6.85% Freddie Mac 30-year average. The principal-and-interest payment is about $2,123 a month.

Because the down payment is under 20%, PMI applies. At the 0.46%–1.50% range, that's $124.20 to $405 a month on top of the payment. A lot of calculators stop here and quietly assume that PMI is part of the payment for the life of the loan.

It isn't. On this loan the balance reaches 80% of the original value — the point where you can request cancellation — around month 99, or 8 years and 3 months in. Automatic termination at 78% lands around month 113, roughly 9 years and 5 months. Those 14 months are the difference between knowing the rule and waiting for the servicer to act. At the top of the PMI range that gap is worth $5,670; at the bottom, $1,739. Same loan, same payment, different total cost — decided entirely by whether you send one letter at the 80% mark.

When this calculator is wrong

The PMI removal timeline above is a paydown schedule, not a market forecast. A few things move it:

• PMI is pegged to the original value, not today's price. The 78% and 80% thresholds are measured against the lower of the purchase price or original appraisal. If your home appreciates, the automatic HPA schedule doesn't speed up — the balance still has to fall on the original-value clock. You can sometimes cancel early on new equity, but that means paying for a fresh appraisal and clearing the lender's own seasoning rules, which is a different process from the automatic one.
• Automatic termination assumes you're current. The servicer only has to drop PMI at 78% if payments are up to date. Miss one near the threshold and the clock slips.
• Taxes and insurance don't hold still. The calculator treats property tax and insurance as flat. In reality reassessments and premium increases move that part of the payment every year, and on a long horizon they can outgrow the principal-and-interest line that never changes.
• FHA loans play by different rules. This models conventional PMI. FHA loans carry mortgage insurance (MIP) that, for most down payments, does not follow the HPA 78% rule and can last the full loan term. If yours is an FHA loan, the removal math here doesn't apply.

What to do with the result

If PMI is a meaningful line on your payment, there are two levers, and they point in different directions. Before you buy, reaching 20% down skips PMI entirely — but draining an emergency fund to get there trades one risk for another, and cash you'll want back within a few years shouldn't go into a down payment. After you buy, the move is calendar-based: note the month your balance is scheduled to hit 80% and request cancellation in writing then, rather than waiting for automatic termination at 78%. On the example above that one letter is worth up to $5,670.

If the payment itself is the problem, the rate and term do far more than PMI ever will. PMI is a temporary surcharge measured in the low hundreds; the difference between a 6.85% and a 7.85% rate on a $324,000 loan runs the payment up for all 360 months. Fix the rate first.

Common questions

How is my monthly mortgage payment calculated?

The principal-and-interest portion comes from the fixed-rate amortization formula — one constant payment that pays off the loan over the term. Early payments are mostly interest; late payments are mostly principal. PMI, property tax, and insurance are added on top as separate lines.

How much does PMI cost?

Between 0.46% and 1.50% of the loan amount per year, billed monthly, depending on your credit score and down payment. On a $324,000 loan that's roughly $124 to $405 a month. It applies only while your loan-to-value ratio is above 80%.

When does PMI get removed?

You can request cancellation when the balance is scheduled to reach 80% of the home's original value. The servicer must cancel it automatically at 78%, provided you're current on payments, and in any case at the loan's amortization midpoint — year 15 of a 30-year loan. Requesting at 80% is faster than waiting for 78%.

Can I remove PMI if my home value went up?

Not automatically. The HPA thresholds are tied to the original value, so appreciation doesn't move the automatic schedule. Some lenders will cancel early based on a new appraisal you pay for, but that's a separate request with its own rules, not the automatic termination.

Is it better to put 20% down or invest the difference?

It depends on the numbers. Putting 20% down removes PMI and lowers the balance, a guaranteed saving. Investing the difference has a higher expected return over long horizons but isn't guaranteed and doesn't help with cash flow. Run both sides before you decide — the down payment isn't free money once you count what it could have earned elsewhere.