In this illustrative example—a $425,000 home, 10% down, 6.5% thirty-year fixed—taxes, homeowners insurance, and PMI add about $963 a month beyond principal and interest. The full estimated payment is about $3,380, not the $2,418 P&I figure ads often highlight.
Those extras are not optional footnotes. On many U.S. loans they are drafted with the mortgage through escrow—and PMI usually applies on conventional loans with less than 20% down.
What does PITI include?
PITI is the four-part housing payment many buyers budget against:
- P — principal (loan balance going down)
- I — interest (cost of borrowed money)
- T — property taxes (often escrowed)
- I — homeowners insurance (often escrowed)
PMI is not the second “I” in PITI. Private mortgage insurance is a separate line when a conventional loan has less than about 20% down. HOA dues are also outside PITI unless you add them.
Want to see principal and interest versus the full draft? The mortgage calculator with taxes, insurance, and PMI uses the same payment math as this article.
How much do taxes, insurance, and PMI add in this example?
Assumptions (disclosed): price $425,000; down 10% (loan $382,500); rate 6.5%; term 30 years; property tax 1.80% of price per year (Texas statewide typical in our data—not a county bill); homeowners insurance $1,800/year; borrower-paid PMI 0.55% of loan per year; HOA $0. Same methodology as the MyClearCost mortgage calculator.
| Line item | Monthly |
|---|---|
| Principal & interest | $2,417.66 |
| Property taxes | $637.50 |
| Homeowners insurance | $150.00 |
| PMI | $175.31 |
| Estimated total payment | $3,380.47 |
How much is PMI per month?
In this example, PMI is $175.31 a month (about $2,104 a year) at a planning rate of 0.55% of the $382,500 loan.
Real PMI is priced from credit score, loan-to-value, loan size, and product—not a single national percent. Industry sketches often fall roughly in the 0.5%–1.5% of loan per year range; your Loan Estimate controls. PMI protects the lender, not you.
Mortgage payment with PMI vs. without PMI
Putting 20% down on the same house removes PMI in this model and shrinks the loan. The monthly drop is not only PMI.
| Item | 10% down | 20% down |
|---|---|---|
| Down payment | $42,500 | $85,000 |
| Loan amount | $382,500 | $340,000 |
| Principal & interest | $2,417.66 | $2,149.03 |
| Property taxes | $637.50 | $637.50 |
| Homeowners insurance | $150.00 | $150.00 |
| PMI | $175.31 | $0 |
| Estimated monthly payment | $3,380.47 | $2,936.53 |
10% down
$3,380 / mo est.
- Down payment
- $42,500
- Loan
- $382,500
- P&I
- $2,417.66
- Taxes
- $637.50
- Insurance
- $150.00
- PMI
- $175.31
20% down
$2,937 / mo est.
- Down payment
- $85,000
- Loan
- $340,000
- P&I
- $2,149.03
- Taxes
- $637.50
- Insurance
- $150.00
- PMI
- $0
Same price, rate, term, tax rate, and insurance. In this conventional-loan example, PMI is modeled when the down payment is under 20%.
How does a 10% down payment affect PMI?
On a conventional loan, less than 20% down usually means PMI until you build enough equity. At 10% down you start near 90% LTV, so PMI is expected unless the loan uses a different structure (for example lender-paid coverage baked into the rate).
Putting 20% down typically avoids borrower-paid monthly PMI on conventional loans. It does not change property tax.
When can you remove PMI?
For many conventional loans on a single-family principal residence (closed on or after July 29, 1999), the Homeowners Protection Act sets federal cancellation and termination rules:
- Borrower-requested cancellation: You can request cancellation in writing when the balance is scheduled to reach—or has reached—80% of the home’s original value, if you meet the Act’s conditions (including being current, a good payment history, no subordinate liens, and, if required, evidence the value has not declined).
- Automatic termination: If you are current, the servicer generally must terminate PMI when the balance is scheduled to reach 78% of original value.
- Final termination: If coverage is still on, it generally must end by the midpoint of the amortization schedule if you are current.
Servicers may have additional investor rules. Check your PMI disclosure and ask the servicer in writing.
FHA, VA, and USDA are different. FHA uses mortgage insurance premiums (MIP) with their own duration rules. VA and USDA use different fee structures. Do not apply conventional PMI cancellation dates to those products.
Why escrow can change the payment later
Your total monthly draft often includes escrow for taxes and insurance. When assessments or premiums rise, the escrow analysis can raise the payment even if the interest rate never moved. A shortage may mean a lump sum or a higher monthly draft; a surplus can mean a refund. Shop with last year’s tax bill, then ask what the next assessment is likely to be—especially on new construction.
Your Next Move
Want your own price, down payment, state tax rate, and PMI assumption? Calculate your mortgage payment with taxes and PMI →
Comparing renting instead? See rent vs buy in dollars.
Sources
- Consumer Financial Protection Bureau, What is private mortgage insurance?
- Consumer Financial Protection Bureau, When can I remove private mortgage insurance (PMI) from my loan?
- Consumer Financial Protection Bureau, What’s the difference between my principal and interest payment and my total monthly payment?
- FDIC, Homeowners Protection Act (PMI Cancellation Act) overview (12 U.S.C. § 4901 et seq.)
- Illustrative math in this article matches the MyClearCost mortgage calculator: standard amortization P&I; monthly tax = price × annual tax rate ÷ 12; monthly insurance = annual premium ÷ 12; monthly PMI = loan × annual PMI rate ÷ 12 when down payment is under 20%. Statewide typical tax rates are planning estimates, not assessor bills. Issuer PMI grids vary.