How much should I put down?

Twenty percent avoids PMI entirely and gets the best pricing, but many conventional programs allow 3–5% down. The trade-off is a higher balance, PMI, and a larger monthly payment.

When does PMI go away?

On most conventional loans PMI terminates automatically once the balance reaches 78% of the original value, and you can request cancellation at 80%. FHA mortgage insurance often lasts the life of the loan.

Why is my lender's quote higher than this estimate?

Quotes may include escrow cushions, flood insurance, mortgage points, or a higher assessed tax value than the purchase price. Closing costs are separate from the monthly payment as well.

Should I choose a 15-year or 30-year term?

A 15-year loan carries a higher payment but a lower rate and dramatically less total interest. A 30-year keeps the payment low and flexible; you can always pay extra voluntarily.

Does this account for rising property taxes?

No. It uses today's tax rate against today's value. Most areas reassess periodically, so expect your escrow portion to increase over the life of the loan.

Real Estate Finance

Mortgage Calculator

Full PITI payment with taxes, insurance and PMI.

Inputs

Given

Home price

Down payment

Interest rate

Term

yrs

Property tax rate

%/yr

Homeowners insurance

$/yr

PMI rate

%/yr

HOA dues

$/mo

Monthly payment breakdown

Computed

Total monthly payment

$3,391.82

$405,000 loan at 6.75% over 30 years · 90% LTV

Principal & interest$2,626.82

Property taxes$412.50

Homeowners insurance$150.00

PMI$202.50

HOA dues$0.00

Down payment$45,000

Loan amount$405,000

PMI applies because the loan-to-value ratio is above 80%. It usually drops off automatically once the balance reaches 78% of the original value.

$3,392/mo total · $2,627 P&I

How this is calculated

A full housing payment is usually called PITI — principal, interest, taxes and insurance — plus PMI and any HOA dues. Principal and interest use the standard amortizing loan formula on the borrowed amount:

loan = home price − down payment

P&I = loan × r ÷ (1 − (1 + r)^−n)

Property taxes are estimated as an annual percentage of the home value divided by twelve. Insurance is your annual premium divided by twelve. PMI is charged as an annual percentage of the loan balance and only applies while the loan-to-value ratio is above 80%:

LTV = loan ÷ home price × 100

PMI monthly = loan × PMI rate ÷ 100 ÷ 12

Lenders typically want the total housing payment at or below 28% of gross monthly income, and all debt payments below about 36–43%. Remember that taxes and insurance are re-assessed periodically, so an escrowed payment usually rises over time even on a fixed-rate loan.

Worked example

A $520,000 home in Ontario with 10% down

Down payment = $52,000, so the loan is $468,000 at 5.25% over 25 years.
Monthly P&I ≈ $2,790 using the amortizing loan formula.
Property tax at 1.0% adds ≈ $433/mo; insurance at $1,800/yr adds $150/mo.
LTV is 90%, so PMI-style insurance applies until the balance crosses 80%: roughly $200/mo at a 0.5% rate.
Total housing payment ≈ $3,575/mo — of which about $785 is not principal or interest.

Common mistakes

Budgeting on P&I alone
Taxes, insurance and PMI routinely add 20–35% on top of principal and interest. Lenders qualify you on the full PITI, and so should your own budget.
Using last year's tax bill
Many jurisdictions reassess after a sale. The seller's tax bill can be far below what the property will cost you at the purchase price — use the rate against your price.
Assuming PMI is permanent
On conventional loans PMI typically ends automatically near 78% of the original value. In Canada, CMHC insurance is a one-time premium added to the loan instead — a different structure entirely.