Mortgage Payment with PMI
PMI, or private mortgage insurance, is commonly added when a buyer puts less than 20 percent down. It can be estimated as an annual percentage of the loan balance, then divided into monthly cost.
PMI estimate formula
Monthly PMI = loan amount * annual PMI rate / 12. The actual PMI charged by a lender can vary by loan type, credit profile, and insurer.
Example
A 320,000 loan with a 0.5 percent annual PMI estimate would add about 133.33 per month. Adding that number to principal, interest, taxes, insurance, and HOA gives a more realistic payment estimate.
What to test
- Compare a smaller down payment with PMI against a larger down payment without PMI.
- Check how the full payment changes when the PMI rate changes.
- Use the amortization view to understand principal reduction over time.