A mortgage payment has four components, often called PITI: principal, interest, taxes, and insurance. Plus HOA if applicable. The principal-and-interest portion is what most online calculators compute. The taxes and insurance portion is where Simi Valley specifically gets more expensive than the national rule of thumb, because California property tax runs 1.1-1.3 percent of value (1.0 percent Prop 13 base plus local bonds and Mello-Roos in some tracts), and homeowners insurance in wildfire-adjacent areas can be double the national average. The calculator on this page handles all four lines and shows the standard amortization formula step by step. As always, estimates only -- confirm with your lender.
What this calculator does (and what it doesn't)
This is a standard PITI + HOA calculator using the industry amortization formula. You enter price, down payment percent, interest rate, term (30 or 15 years), property tax rate, and HOA. It returns monthly principal and interest, monthly property tax impound, monthly HOA, and the combined monthly payment.
It does not compute: PMI (private mortgage insurance, which applies to conventional loans with less than 20% down -- roughly 0.3-1.5% of loan annually), homeowners insurance (highly variable in Simi Valley -- see the insurance estimator), FHA upfront MIP and annual MIP, VA funding fee, ARM (adjustable-rate) future resets, or the exact tax-deductible portion of your mortgage interest.
Treat the output as a budget planning figure. The binding monthly payment comes from your lender's Loan Estimate.
The math behind the numbers
The amortization formula. The monthly principal-and-interest payment on a fully amortizing fixed-rate loan is:
M = P * [ r * (1+r)^n ] / [ (1+r)^n - 1 ]
Where M is the monthly payment, P is the loan principal, r is the monthly interest rate (annual rate / 12), and n is the total number of monthly payments (360 for a 30-year, 180 for a 15-year).
Worked example. $708,000 loan, 6.75 percent annual rate, 30 years. r = 0.0675/12 = 0.005625. n = 360. (1+r)^n = 1.005625^360 = 7.554. Numerator: 0.005625 * 7.554 = 0.04249. Denominator: 7.554 - 1 = 6.554. M = 708,000 * (0.04249 / 6.554) = 708,000 * 0.006484 = $4,592.84. Total interest paid over 30 years if you never refinance or pay extra: $4,592.84 * 360 - $708,000 = $945,422.
Property tax impound. Annual tax = price * property_tax_rate. Monthly impound = annual / 12. The lender holds a 2-month cushion by RESPA rule. Default to 1.15% in the calculator (Prop 13 base 1.0% + Simi local bonds ~0.15%), but enter higher if you are in a Mello-Roos tract.
HOA. A direct add-in, not part of the loan but part of your monthly housing cost and counted by lenders in your DTI.
Try the calculator
Enter your numbers below for a quick estimate. Confirm everything with your lender before making decisions.
Estimate only. Insurance and exact lender fees not included. Confirm with your lender.
A worked example: $885,000 Simi Valley home, 20% down
Median Simi Valley single-family home, $885,000. Conventional 30-year fixed, 20 percent down ($177,000), loan amount $708,000, rate 6.75%, property tax 1.15%, no HOA, no Mello-Roos.
Principal & interest: $4,592/mo. Property tax impound: $885,000 * 1.15% / 12 = $848/mo. HOA: $0. PITI without insurance: ~$5,440/mo. Add homeowners insurance (~$330/mo at midpoint for Simi Valley outside the highest fire zones) and you land at ~$5,770/mo in true monthly housing cost.
Over 30 years on the same loan, total interest paid (if you never refinance or prepay) is approximately $945,000 -- more than the loan principal itself. Refinancing when rates drop is the single biggest long-term lever after the down payment.
15-year comparison. Same loan at 6.25% on a 15-year fixed (15-year rates typically run 0.5 percentage point below 30-year): P&I = $6,072/mo. Monthly payment is higher but total interest over 15 years is ~$385,000 -- a $560,000 lifetime savings vs the 30-year.
What buyers typically forget
- Homeowners insurance -- not in this calculator. In Simi Valley, plan on 0.35-0.50% of home value annually outside the highest fire zones, 0.7-1.5% in CAL FIRE Very High Fire Hazard Severity Zones.
- Mello-Roos (CFD) -- if you are buying in Big Sky or parts of Sycamore Grove, add the CFD to the property tax line. Use a higher tax rate input or enter total annual tax / value as a percentage. See the property tax calculator.
- PMI on less than 20% down -- a conventional loan with 10% down adds PMI of roughly 0.5-1.0% of loan annually until you reach 20% equity. On a $708K loan that is $295-$590/month extra.
- HOA dues -- if buying in Wood Ranch, Sycamore Grove, Big Sky, or any planned community, include the HOA. See HOA fees by neighborhood for ranges.
- Annual tax escalator -- under Prop 13, your assessed value grows up to 2% per year. Plus Mello-Roos can escalate up to 2% per year. Your monthly impound goes up over time even if your P&I stays fixed.
- Insurance escalator -- premiums in California have been increasing 5-15% per year for wildfire-exposed properties.
How this maps to your Loan Estimate
On page 1 of the Loan Estimate, the 'Projected Payments' table shows your P&I, taxes, insurance, and any other escrowed items broken out. Compare those numbers to the calculator output here. P&I should match exactly if you enter the same rate, term and loan amount. Taxes and insurance on the LE are the lender's best estimate -- the exact amount can shift slightly between LE and CD.
On page 3 of the LE, 'In 5 Years' shows total payments you will have made in 5 years and how much principal you will have paid down. That is the single best comparison metric across competing loan offers.
Simi Valley-specific factors that move the monthly
Mello-Roos tracts cost $150-$400/month more. An $885K Big Sky home has the same P&I as an $885K Wood Ranch home, but ~$250/month more in impound from the CFD.
Wildfire zone insurance can add $400-$800/month. A baseline policy on a flat-area home might run $2,500/year (~$208/month). The same home in a Very High Fire Hazard Severity Zone might run $7,000-$15,000/year, or $580-$1,250/month.
HOAs in Wood Ranch and Sycamore Grove stack a master HOA on top of a sub-association HOA -- total $200-$400/month is common.
Solar lease payments -- if you assume an existing solar lease, add the lease payment ($150-$300/month). Not a mortgage line, but a real monthly housing cost.
When to confirm with a professional
Your lender issues the Loan Estimate and Closing Disclosure -- the binding numbers. Your insurance broker binds the homeowners policy and gives you the real annual premium. Your CPA tells you what portion of mortgage interest and property tax is deductible in your situation (the SALT cap limits state and local taxes to $10,000/year for itemizers).
If you want a side-by-side comparison of two homes' true monthly cost with all four PITI lines plus Mello-Roos and insurance dialed in, I run that spreadsheet for clients regularly. Reach out and I will build one for your specific shortlist.
Two Simi Valley scenarios: rate sensitivity
Rates move. The same $885,000 home looks very different at 6.0% vs 7.5%. Sensitivity table on a 30-year, 20% down ($708,000 loan):
| Rate | P&I /mo | Total interest over 30 yrs | Income to qualify (43% DTI, ~$1K other debt) |
|---|---|---|---|
| 5.50% | $4,021 | $739K | ~$140K/yr |
| 6.00% | $4,246 | $821K | ~$146K/yr |
| 6.50% | $4,476 | $903K | ~$153K/yr |
| 6.75% | $4,592 | $945K | ~$156K/yr |
| 7.00% | $4,712 | $988K | ~$160K/yr |
| 7.50% | $4,953 | $1.075M | ~$167K/yr |
A 1-point rate move (6.5% to 7.5%) changes the monthly payment by ~$477 and lifetime interest by ~$172,000. It also changes the income required to qualify by ~$14,000/year. This is why rate locks matter and why your pre-approval letter has a rate-validity expiration on it.
Refinancing math: when it makes sense
The classic refinance break-even calculation: closing costs to refi divided by monthly savings = months to recoup. If you plan to own past that month, the refi saves you money.
Example: drop your 6.75% rate to 5.75% on the same $708,000 loan. New P&I = $4,134. Savings = $458/mo. Refi closing costs ~$8,000. Break-even = 17.5 months. If you plan to own past month 17, refi pencils.
Caveats: a true refi includes resetting the amortization schedule (you re-start interest-heavy at month 1), losing whatever principal pay-down equity you had earned at the lower remaining balance, and the opportunity cost of those closing costs. The break-even is necessary but not sufficient; compare total interest paid over your remaining ownership period, not just monthly savings.
Cash-out refis follow different math because you are extracting equity to use elsewhere. Run a separate model that compares the rate on the cash-out vs the expected return on whatever you do with the cash.
Pre-approval vs pre-qualification vs full underwrite
Three distinct levels of lender commitment, often conflated. In a multiple-offer Simi Valley market the distinction can decide whether your offer is accepted.
Pre-qualification -- the lightest. Based on stated income, assets, and credit score. No documents reviewed. Useful for a first-pass budget but should not be relied on as proof of financing.
Pre-approval -- the lender pulls credit, reviews W2s/pay stubs/bank statements/tax returns, and issues a pre-approval letter conditional on identifying a property, appraisal, and final underwriting. This is the standard for making offers in Simi Valley as of 2026.
TBD underwriting -- the lender runs the file through actual underwriting before you identify a property. The pre-approval is conditional only on the property and appraisal. Stronger than standard pre-approval; many listing agents in Simi Valley treat a TBD-underwritten offer as nearly cash-equivalent for offer strength purposes.
Full cash offer -- proof of funds (brokerage or bank statement). Fastest close, strongest negotiating position. Many cash buyers do a 'delayed financing' refi 60-90 days after close to recapture the cash.
If you are buying in a tight Simi Valley submarket (Bridle Path, certain Wood Ranch pockets, Big Sky view lots), upgrade from pre-approval to TBD underwriting before you start writing offers. The lender will need 1-2 weeks; build it into your timeline.
Two paths to the same monthly: more down or longer term
Many buyers think of the mortgage decision as a single knob (the rate). It is really three knobs that interact: loan amount (driven by down payment), interest rate (driven by credit, points, market), and term (15, 20, 30). To land on a target $5,000/month P&I on an $885,000 home:
| Down | Loan | Rate | Term | P&I /mo | Lifetime interest |
|---|---|---|---|---|---|
| 20% ($177K) | $708K | 6.75% | 30 yr | $4,592 | $945K |
| 25% ($221K) | $664K | 6.75% | 30 yr | $4,307 | $887K |
| 30% ($266K) | $619K | 6.75% | 30 yr | $4,017 | $827K |
| 20% + 1 pt | $708K | 6.50% | 30 yr | $4,476 (+ $7K up front) | $903K |
| 20% with 15-yr | $708K | 6.25% | 15 yr | $6,072 | $385K |
Each lever has a tradeoff. More down ties up cash that could earn elsewhere. Points pay back over 4-6 years -- only worth it if you are confident in long ownership at the rate. 15-year term increases monthly commitment but saves more than half a million in lifetime interest. ARM (5/1, 7/1, 10/1) -- not shown -- lowers initial rate by 0.5-1.0% in exchange for reset risk after the fixed period.
There is no universally right answer. Run the math against your specific situation: hold horizon, alternative investment returns on the cash, comfort with monthly commitment, and refinance flexibility.
What the calculator does NOT include (be honest about this)
- PMI on less than 20% down (add 0.3-1.0% of loan annually).
- FHA UFMIP (1.75% added to loan) and annual MIP (~0.55%).
- VA funding fee (2.15-3.30%, financeable).
- Homeowners insurance (Simi Valley range $2,500-$15,000/yr -- see insurance calculator).
- Mello-Roos (add to property tax rate or use property tax calculator).
- Annual property tax escalation (~2%/yr per Prop 13).
- Solar lease payments if assuming an existing lease.
- ARM reset risk after the fixed period.
- Refinance closing costs when you eventually refi.
Documents to gather before applying
Speeding from pre-approval to TBD-underwritten to Loan Estimate is about document readiness. Have these ready before you apply:
- Two most recent years of W-2s
- Two most recent years of federal tax returns (all schedules)
- Most recent 30 days of pay stubs
- Two most recent months of all asset statements (checking, savings, brokerage, retirement)
- Government-issued photo ID
- If self-employed: two years of business returns, YTD P&L, two years of personal returns
- If using gift funds: gift letter from donor, donor's account statement
- If using investment property income: schedule E or current lease + receipts
- If recently divorced: divorce decree, child support / alimony orders
- If currently renting: 12-24 months of rental payment history
Have these in a single shared folder before you start the application. The faster your lender can review, the stronger your offer position when you find the right Simi Valley home.
Reading the Loan Estimate side by side
When you have two competing loans, compare the LEs at five specific places: (1) Loan terms box on page 1 -- same amount, rate, term, monthly P&I? (2) Projected Payments table on page 1 -- same taxes and insurance assumption? If one LE uses an artificially low tax or insurance assumption, the lower payment is misleading. (3) Loan Costs section A and B on page 2 -- origination and services you cannot shop. These are the comparable lender fees. (4) Section J Total Closing Costs -- the all-in upfront cost. (5) Comparisons box on page 3 -- 'In 5 Years' total you will have paid and how much principal you will have paid down. The best single comparison metric.
If two lenders quote the same rate but the LEs show different '5-year totals,' the difference is in the fees. Ask both lenders to match each other's fees, then re-compare. Lender fees are negotiable.
Frequently Asked Questions
What is PITI?
Principal, Interest, Taxes, Insurance. The four components of a typical monthly mortgage payment when you have an impound (escrow) account. Lenders qualify you on the full PITI plus HOA -- not just principal and interest.
How is the monthly mortgage payment calculated?
Using the standard amortization formula: M = P * [r(1+r)^n] / [(1+r)^n - 1], where P is loan amount, r is monthly interest rate (annual / 12), and n is total months (360 for 30-year). Then add monthly property tax, insurance, and HOA.
What property tax rate should I use for Simi Valley?
1.15% is a reasonable default -- 1.0% Prop 13 base plus ~0.15% local voter-approved bonds. If you are buying in Big Sky or Sycamore Grove, add Mello-Roos on top. See the property tax calculator for tract-specific math.
Should I do a 30-year or 15-year mortgage?
30-year has a lower monthly payment and more flexibility. 15-year saves significant lifetime interest (often $500K+ on a Simi Valley-priced loan) but requires a higher monthly commitment. The math depends on your cash flow, other investment opportunities, and how long you plan to own.
Does this include PMI?
No. PMI (private mortgage insurance) applies to conventional loans with less than 20% down. It typically runs 0.3-1.5% of the loan annually until you reach 20% equity. On a $708K loan at 0.7%, that is ~$413/month additional.
Why is my Simi Valley payment higher than online national calculators?
Two reasons: California property tax (1.15-1.5% with local bonds and Mello-Roos) runs higher than the 1.0% many calculators default to, and Simi Valley homeowners insurance in fire-exposed areas runs 2-4x the national average.
How much income do I need to qualify for the median price?
Lenders typically allow 43-50% back-end DTI (debt-to-income). On a $5,440/month PITI plus modest other debt, you need roughly $13,000-$15,000/month in gross income (~$160K-$180K annually) to qualify.
Can I prepay principal to save interest?
Yes -- conventional loans in California allow prepayment without penalty. An extra $500/month on a 30-year $708K loan at 6.75% saves ~$215,000 in interest and shortens the loan by ~8 years.
