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Additional Monthly Costs

The items described below are typically added to your monthly payment but vary based on several factors pertaining to your specific situation and location.

  • Mortgage Insurance

    If a buyer puts down less than 20 percent of the selling price on the mortgage, lenders may require the buyer to buy private mortgage insurance (PMI). This provides insurance to the lender in case the buyer is not able to repay the loan. If PMI is required, most buyers prefer to pay it monthly, together with their mortgage payment. Your basic monthly mortage payment can be determined with our simple mortgage calculator.

    The annual cost of PMI can vary but is usually around 1 percent of the total loan value, depending on the loan terms and loan type. Credit score is typically the biggest factor in determining cost.

    Once the buyer has 20 percent equity in the home, PMI is usually no longer required and can often be canceled. Please note there are some types of loans where PMI may be waived or avoided from the very beginning.

  • Homeowners Insurance

    Also known as hazard insurance, most lenders require this insurance to provide damage protection for your home and personal property from a variety of events, including fire, vandalism, burglary, storms, explosions, and more. All homeowners insurance policies contain personal liability coverage, which protects against lawsuits involving injuries that occur on and off your property.

    The cost of homeowners insurance often depends on what it would cost to replace the house and additional items that are attached to the policy. The insurance policy outlines what will and will not be paid in the case of various events. Claims due to floods, war, and other cases (like termites), are typically excluded. However, special insurance can be purchased for these possibilities.

    In a case that requires you to live somewhere else because of damage to your home, most plans cover costs of living away from home, such as hotel and meal expenses, up to 20 percent of your home's liability limit. Other policies may provide unlimited coverage for living expenses but only for a limited period of time.

    Your basic monthly mortgage payment can be determined with our simple mortgage calculator. Typically, your homeowners insurance is divided into equal installments that are paid along with your monthly mortgage payment. These payments are stored into an "escrow account." When the homeowners insurance policy is due for payment, the lender will pay it from this escrow account. The same is true for your property taxes.

  • Property Taxes

    Property tax on real estate is usually required by local government at the municipal or county level. Rates vary across the United States between about 0.2% and 4% of the home value. In some states, personal property is also taxed.

    Property taxes are the main taxes supporting local education, police/fire protection, some free medical services, and most other local infrastructure.

    Most lenders require homeowners to pay into what is called an "escrow account." You pay a portion of the estimated property taxes into this account each month. This payment is usually sent along with your monthly mortgage payment. Your basic monthly mortage payment can be determined with our simple mortgage calculator. When your property taxes are due, the lender will pay them from this escrow account. The same is true for your homeowners insurance.

Simple Mortgage Calculator

Launched 4 years ago, MortCal is our simple mortgage calculator. Sometimes all you need to know is the basic monthly payment, right?

mortgage calculator

This simple mortgage calculator is provided free by Monsoon Joe, Inc.