Key takeaways
- PITI = principal, interest, taxes and insurance.
- PMI applies when you put down less than 20% on a conventional loan.
- Taxes and insurance can add hundreds of dollars a month.
How the mortgage calculator works
Your lender calculates principal and interest (P&I) with the standard amortization formula. Most US lenders also collect property tax and insurance through escrow, so they are part of the monthly bill. If you put down less than 20% on a conventional loan, private mortgage insurance (PMI) is added until you reach 20% equity.
Formula
Standard formula. Further reading: CFPB – Buying a house · Investopedia – Amortization
Worked example
A $300,000 home with $60,000 down (20%) at 6.5% for 30 years: P&I = $1,516.96. Add 1.2% property tax ($300/mo) and $1,200/yr insurance ($100/mo) for a total of $1,916.96. No PMI is due at 20% down.
Change any number above and the plain-English explanation updates instantly with your own figures.
Frequently asked questions
What is PMI and when does it go away?
Private mortgage insurance protects the lender when you put down less than 20%. On conventional loans it can be removed at 20% equity and ends automatically at 22%.
What is included in PITI?
PITI means principal, interest, taxes and insurance — the four parts of a typical monthly mortgage payment.
15-year or 30-year mortgage?
A 15-year loan has higher payments but a lower rate and far less total interest. A 30-year loan is more affordable month to month.
How much house can I afford?
A common guideline is keeping total housing costs under about 28% of gross monthly income, and all debt payments under 36%.
Are property taxes the same everywhere?
No. US effective property tax rates range from roughly 0.3% to over 2% of home value depending on state and county.
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Results are estimates for educational purposes and are not financial advice.