The five parts of a monthly payment
Only the first part is the loan. Principal and interest (P&I) come from the level-payment formula applied to the amount you actually borrow — the price minus the down payment. The rest are escrow items the lender collects with the payment and pays out on your behalf: property tax ÷ 12, home insurance ÷ 12, mortgage insurance while it applies, and any HOA or management fee.
A 400,000 home with 20% down at 6.5% over 30 years borrows 320,000, so P&I is 2,022.62. Add 4,800 of annual property tax (400 a month), 1,500 of insurance (125) and a 50 HOA fee and the payment becomes 2,597.62 — 28% more than the loan payment alone. That gap is the single most common reason a budget built on a “monthly payment” calculator turns out to be wrong.
Property tax can be entered either as a percentage of the price or as an annual amount, whichever your listing gives you. Escrow items are recurring costs that do not fall as the balance falls, so they continue at the same level for the whole term — and after the mortgage is paid off, they continue for as long as you own the home.
Down payment, LTV and why 20% is the number everyone repeats
Loan-to-value is the loan divided by the price. Put 20% down on a 400,000 home and the LTV is 80%; put 10% down and it is 90%, the loan is 360,000 and P&I rises from 2,022.62 to 2,275.44 — 252.82 a month more, before mortgage insurance is added on top.
20% is the threshold at which US lenders stop requiring private mortgage insurance, which is the whole reason the figure is repeated so often. The amount and percentage fields here are linked in both directions, so you can type either one — enter 15% to see what the payment looks like, or type the cash you actually have and read the percentage back.
Korea works the other way around: there is no mortgage insurance to avoid, but a regulatory LTV cap decides how much you may borrow at all, tightened further by DSR limits on total debt service against income. If your cap is 70%, enter 30% as the down payment — the calculator then shows what that ceiling costs you monthly.
How PMI is charged and exactly when it stops
The monthly premium is loan amount × PMI rate ÷ 12. Typical US rates run from about 0.3% to 1.5% a year depending on credit score and LTV. On the 10%-down example, 0.5% of 360,000 is 1,800 a year, or 150 a month.
This tool charges it only while the opening balance of the month is above 80% of the original price — the borrower-request threshold. On that loan the last month carrying PMI is payment 95, so the total paid is 14,250 for insurance that protects the lender, not you. The denominator is always the original purchase price: no reappraisal is assumed, because a lender is not obliged to accept one.
Under the US Homeowners Protection Act the servicer must cancel PMI automatically once the scheduled balance reaches 78% of the original value, and again at the midpoint of the amortization term regardless of balance. Cancellation at 80% is your right to request, but you have to ask. Note that FHA mortgage insurance is a different product with different rules and often lasts the life of the loan — set the PMI rate to 0 and budget it separately.
15-year vs 30-year: the trade in numbers
Take the same 320,000 loan at 6.5%. Over 30 years the payment is 2,022.62 and total interest is 408,140.64 — more than the amount borrowed. Over 15 years the payment is 2,787.54 and total interest is 181,758.21.
So 764.92 more a month buys 226,382.43 less interest. In practice lenders also quote a lower rate on the shorter term, which widens the gap further. The catch is that the higher payment is contractual — in a bad year you cannot revert to the 30-year payment, which is the argument for taking the 30-year loan and paying extra voluntarily.
Change the term field and everything below it — the schedule, the payoff date, the PMI end month, the total out of pocket — updates together, so the comparison takes one edit rather than two tabs.
Extra payments and the return they earn
The extra amount goes straight to principal every month. On 320,000 at 6.5% over 30 years, an extra 300 a month clears the loan 106 months — nearly nine years — early and saves 138,444.91 in interest. It also brings the PMI cut-off forward, because the balance crosses 80% sooner.
The return on a prepayment is exactly the mortgage rate, guaranteed and tax-free in the sense that you avoid a cost rather than earn income. Compare it against what the same money would earn elsewhere after tax: at a 6.5% mortgage rate, an investment has to beat 6.5% after tax to win, which is a high bar. Where mortgage interest is tax deductible the effective rate is lower and the comparison shifts.
The calculator does not deduct a prepayment penalty. Korean mortgages charge 중도상환수수료 of roughly 0.6–1.4% of the prepaid principal, sliding to zero over three years; US conforming loans usually have none. Subtract whatever applies before treating the saving as real.
Realistic tax and insurance figures
US effective property tax rates vary by roughly a factor of eight between states — from about 0.3% of value in Hawaii and Alabama to over 2% in New Jersey and Illinois, with a national median near 1%. Do not use a national average: look up the actual annual tax on the listing, which is public information, and enter it as an amount.
Home insurance in the US commonly runs 0.3–1% of the value a year and much more in wildfire and hurricane regions; it is the escrow line that has moved fastest in recent years, so use a current quote rather than last year’s number. HOA and condo fees are entered as a monthly figure because that is how they are billed.
Korean mortgages have no escrow account: 재산세 is billed to the owner in July and September and 종합부동산세 in December, so nothing about them appears in the monthly payment. To model a Korean loan, set tax, insurance and PMI to 0 and read the P&I line — then budget the property taxes separately as an annual lump.
What the model assumes, and where it stops
One fixed rate for the whole term, equal payments (원리금균등), no grace period and no rate reset. Korean 변동금리 loans reprice against COFIX every 6 or 12 months and 거치기간 products pay interest only for the first few years — for those, run the calculation once at today’s rate and again at the cap, and treat the pair as your range.
Closing costs, appraisal and origination fees, title insurance, transfer or acquisition tax (취득세), maintenance and utilities are all outside the calculation. The “total out of pocket” figure adds up the down payment, every scheduled payment, PMI and the recurring escrow items over the life of the loan — it is a mortgage total, not the cost of owning the home.
Input limits: term up to 50 years, rate 0–50%, down payment no larger than the price. Pay in full (a down payment equal to the price) and the tool drops the loan entirely and shows only the recurring costs, which is a legitimate way to see what a paid-off house still costs each month.