Mortage Calculator with Pmi

Mortgage Payment with PMI Calculator

function calculateMortgageWithPmi() { var propertyPrice = parseFloat(document.getElementById('propertyPrice').value); var initialEquity = parseFloat(document.getElementById('initialEquity').value); var repaymentPeriod = parseFloat(document.getElementById('repaymentPeriod').value); var annualInterestRate = parseFloat(document.getElementById('annualInterestRate').value); var annualPmiRate = parseFloat(document.getElementById('annualPmiRate').value); var annualPropertyTax = parseFloat(document.getElementById('annualPropertyTax').value); var annualHomeInsurance = parseFloat(document.getElementById('annualHomeInsurance').value); var resultDiv = document.getElementById('result'); resultDiv.style.backgroundColor = '#e9f7ee'; resultDiv.style.borderColor = '#d4edda'; resultDiv.style.color = '#155724'; if (isNaN(propertyPrice) || isNaN(initialEquity) || isNaN(repaymentPeriod) || isNaN(annualInterestRate) || isNaN(annualPmiRate) || isNaN(annualPropertyTax) || isNaN(annualHomeInsurance) || propertyPrice <= 0 || repaymentPeriod <= 0 || annualInterestRate < 0 || annualPmiRate < 0 || annualPropertyTax < 0 || annualHomeInsurance = propertyPrice) { resultDiv.innerHTML = "Initial equity cannot be greater than or equal to the property price. You would not need a mortgage."; resultDiv.style.backgroundColor = '#f8d7da'; resultDiv.style.borderColor = '#f5c6cb'; resultDiv.style.color = '#721c24'; return; } var loanAmount = propertyPrice – initialEquity; var monthlyInterestRate = (annualInterestRate / 100) / 12; var numberOfPayments = repaymentPeriod * 12; var principalAndInterest = 0; if (monthlyInterestRate > 0) { principalAndInterest = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1); } else { principalAndInterest = loanAmount / numberOfPayments; // Simple division if interest rate is 0 } var monthlyPmi = 0; // PMI is typically required if initial equity is less than 20% if ((initialEquity / propertyPrice) < 0.20) { monthlyPmi = (loanAmount * (annualPmiRate / 100)) / 12; } var monthlyPropertyTax = annualPropertyTax / 12; var monthlyHomeInsurance = annualHomeInsurance / 12; var totalMonthlyPayment = principalAndInterest + monthlyPmi + monthlyPropertyTax + monthlyHomeInsurance; resultDiv.innerHTML = `

Estimated Monthly Payment:

$${totalMonthlyPayment.toFixed(2)} Breakdown: Principal & Interest: $${principalAndInterest.toFixed(2)} PMI: $${monthlyPmi.toFixed(2)} Property Tax: $${monthlyPropertyTax.toFixed(2)} Homeowner's Insurance: $${monthlyHomeInsurance.toFixed(2)} `; }

Understanding Your Mortgage Payment with PMI

Buying a home involves more than just the principal and interest on your loan. Your total monthly housing expense often includes several components, especially if you're making a smaller initial equity contribution. This calculator helps you estimate your complete monthly mortgage payment, including Private Mortgage Insurance (PMI).

What is a Mortgage Payment?

A mortgage payment is the regular payment you make to your lender to repay the money you borrowed to purchase a home. It typically consists of four main parts, often referred to as PITI:

• Principal: The portion of your payment that goes towards reducing the actual loan amount you owe.
• Interest: The cost of borrowing the money, calculated as a percentage of the outstanding loan balance.
• Taxes (Property Tax): Funds collected by your lender and held in an escrow account to pay your annual property taxes to your local government.
• Insurance (Homeowner's Insurance): Funds collected by your lender and held in an escrow account to pay your annual homeowner's insurance premium, which protects your home against damage.

What is Private Mortgage Insurance (PMI)?

Private Mortgage Insurance (PMI) is a type of insurance that protects the lender, not you, if you default on your mortgage. It's typically required when you make an initial equity contribution (down payment) of less than 20% of the home's purchase price. Lenders view loans with lower initial equity as higher risk, and PMI mitigates that risk for them.

PMI is usually paid monthly as part of your mortgage payment. The cost of PMI varies but generally ranges from 0.3% to 1.5% of the original loan amount per year. Once you've built up sufficient equity in your home (usually around 20-22% of the home's original value), you can typically request to have PMI removed, saving you a significant amount on your monthly payments.

How Our Calculator Works

Our calculator takes into account all these factors to give you a comprehensive estimate of your monthly housing costs:

• Property Purchase Price: The total cost of the home you are buying.
• Initial Equity Contribution: The amount of money you are paying upfront towards the home's purchase.
• Repayment Period (Years): The length of time you have to repay the loan, typically 15 or 30 years.
• Annual Loan Interest Rate (%): The annual percentage rate your lender charges for the mortgage.
• Annual PMI Premium Rate (%): The annual percentage rate for your Private Mortgage Insurance, applied to the loan amount. This is included if your initial equity is less than 20%.
• Annual Property Tax ($): Your estimated yearly property tax bill.
• Annual Homeowner's Insurance ($): Your estimated yearly homeowner's insurance premium.

By inputting these details, the calculator first determines your loan amount (Property Price – Initial Equity). It then calculates the principal and interest payment using standard mortgage formulas. Finally, it adds the estimated monthly PMI (if applicable), property tax, and homeowner's insurance to provide your total estimated monthly payment.

Example Calculation:

Let's use the default values in the calculator:

• Property Purchase Price: $300,000
• Initial Equity Contribution: $30,000 (10%)
• Repayment Period: 30 Years
• Annual Loan Interest Rate: 6.5%
• Annual PMI Premium Rate: 0.5%
• Annual Property Tax: $3,600
• Annual Homeowner's Insurance: $1,200

1. Loan Amount: $300,000 – $30,000 = $270,000

2. Monthly Interest Rate: 6.5% / 12 / 100 = 0.00541667

3. Number of Payments: 30 years * 12 months/year = 360

4. Principal & Interest (P&I): Using the mortgage formula, this would be approximately $1,706.95.

5. Monthly PMI: Since initial equity is 10% (less than 20%), PMI applies. ($270,000 * 0.5% / 100) / 12 = $112.50

6. Monthly Property Tax: $3,600 / 12 = $300.00

7. Monthly Homeowner's Insurance: $1,200 / 12 = $100.00

Total Estimated Monthly Payment: $1,706.95 (P&I) + $112.50 (PMI) + $300.00 (Tax) + $100.00 (Insurance) = $2,219.45

This calculator provides a valuable estimate to help you budget for your home purchase. Remember that actual rates and costs can vary, so always consult with a financial advisor and mortgage lender for personalized advice.