What this calculator includes

Most mortgage calculators show you principal and interest, then stop. That number is typically 25 to 35 percent lower than what actually leaves your bank account each month, which is why so many first-time buyers are surprised at closing.

This one adds the costs that lenders bundle into your monthly payment: property tax, homeowners insurance, private mortgage insurance (PMI), and HOA dues. Your lender collects tax and insurance into an escrow account and pays those bills for you, so they arrive as one combined monthly figure.

Why your down payment matters more than you think

Crossing the 20 percent threshold does two things at once. It shrinks the amount you borrow, and it removes PMI entirely. On a $420,000 home, moving from 10 percent down to 20 percent cuts the monthly payment by several hundred dollars, and a large part of that saving comes from dropping PMI alone.

If you are already paying PMI, you are not stuck with it forever. Under the Homeowners Protection Act, lenders must automatically cancel PMI once your loan balance reaches 78 percent of the original home value. You can usually request cancellation earlier, at 80 percent. The calculator above shows the month your PMI is expected to drop off.

What this calculator does not cover

Closing costs are not included. Budget roughly 2 to 5 percent of the purchase price for lender fees, title insurance, appraisal, and prepaid escrow. These are paid once, at closing.

It also assumes a fixed rate for the full term. If you are considering an adjustable-rate mortgage, the payment shown applies only to the introductory period. Property tax is treated as a flat annual figure, whereas real assessments tend to rise over time.