Mortgage calculators

What is Better: take a Second Loan or Pay PMI?

Input Information

Show Schedule Table
Property Information
Home Value :		($)
Additional Information
Annual PMI :		($) (%)
Down Payment :		5 % 10 % 15 %
	Standard	80% Loan	Second Loan
Interest Rate :	(%)	(%)	(%)
Length :	Yrs	Yrs	Yrs
Points :	(%)	(%)	(%)
Closing Costs :	($)	($)	($)

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When you take out your home mortgage loan, you might want to consider taking out an 80/15 loan in order to avoid PMI. By going this route, you could potentially save a great deal of money, though your upfront costs may be a bit more. Pretend the home you are interested in purchasing has a value of $500,000.00 and you are prepared to put down $50,000.00 as a down payment. With a standard 30 year loan with an interest rate of 6.000% and 1.000 point(s), you will have to pay $55,700.00 up front for closing and would have a monthly payment of $2,697.98. In the end, you will have paid $971,258.43 toward your home. If you opt for an 80/15 loan, you can avoid making PMI payments altogether. Because it involves taking out two loans, however, you will have to pay a bit more in upfront costs. In this scenario, that amounts to $58,200.00. Your monthly payments, however, will be slightly LESS at $2,448.67. And, in the end, you will have paid only $805,564.29 – that’s a total SAVINGS of $165,694.14!