1. What is a Refinance Calculator with PMI?

This calculator helps homeowners estimate their new monthly payment when refinancing a mortgage that includes Private Mortgage Insurance (PMI). It accounts for the loan amount, interest rate, term, and monthly PMI cost.

2. How Does the Calculator Work?

The calculator uses the standard mortgage payment formula plus PMI:

Where:

• \( PMT \) — Total monthly payment
• \( P \) — Principal loan amount
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (loan term in years × 12)
• \( PMI \) — Monthly private mortgage insurance cost

Explanation: The formula calculates the base mortgage payment and adds the fixed PMI amount.

3. Understanding PMI in Refinancing

Details: PMI is typically required when refinancing with less than 20% equity in the home. It protects the lender if the borrower defaults on the loan.

4. Using the Calculator

Tips: Enter the new loan amount, annual interest rate, loan term in years, and monthly PMI amount. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: When is PMI required in a refinance?
A: PMI is usually required when your loan-to-value (LTV) ratio exceeds 80%, meaning you have less than 20% equity in the home.

Q2: How is PMI calculated?
A: PMI typically ranges from 0.5% to 1.5% of the loan amount annually, divided into monthly payments.

Q3: Can I remove PMI after refinancing?
A: Yes, once you reach 20% equity through payments or home value increases, you can request PMI removal.

Q4: Does refinancing always require PMI?
A: No, if you maintain at least 20% equity in the home, PMI won't be required on the new loan.

Q5: Are there alternatives to monthly PMI?
A: Some lenders offer single-premium PMI (paid upfront) or lender-paid MI (built into the interest rate).