Mortgage Calculator with Taxes and Insurance

Shopping for a mortgage by the loan payment alone is like shopping for a car by the engine price and forgetting the wheels. Property tax and home insurance are not optional extras — they are collected with the mortgage every month, and on many homes they add $400 to $600 to the bill. This page explains how taxes and insurance work inside a mortgage, and the mortgage calculator with taxes and insurance above shows the full PITI total for any home you enter.

On the default example — a $350,000 home, $70,000 down, $280,000 at 6.5% for 30 years — principal and interest are $1,770 a month. Property tax of $3,500 a year adds $292 a month and insurance of $1,500 a year adds $125, giving a PITI total of $2,186. That $417 of tax and insurance is 19% of the monthly payment, and it is the part most first-time buyers forget to budget.

What Is PITI?

PITI is the four-part monthly payment: principal, interest, taxes, and insurance. The lender usually collects all four in one payment and holds the tax and insurance parts in an escrow account, paying the county and the insurer when the bills come due. This protects the lender — unpaid tax can put a lien on the home, and an uninsured home is a risk to the collateral — and it protects you from a sudden $3,500 tax bill. Some borrowers with 20% or more equity can ask to pay tax and insurance themselves, but most keep escrow for the simplicity.

Two costs sit outside PITI but still come out of your pocket each month: PMI, when the down payment is under 20%, and HOA dues in managed communities. The calculator above includes both, so the headline number is the true monthly cost. The Consumer Financial Protection Bureau explains escrow accounts in plain language, including your right to an annual escrow statement.

How Property Tax Is Calculated

Property tax is set locally, and rates vary enormously — from under 0.5% of value a year in some states to over 2% in others. The bill is the assessed value of the home multiplied by the local tax rate, and it is usually paid twice a year from escrow. On a $350,000 home, a 1% rate means $3,500 a year, or $292 a month; a 2% rate means $7,000 a year, or $583 a month — a $291 monthly difference for the same house, decided entirely by location. That is why two identical homes in different counties can have very different monthly costs.

Assessed value is not always the market price: some areas reassess only every few years, and many offer a homestead exemption that lowers the taxable value for a primary residence. Always check the actual current tax bill for the property you are considering, not a statewide average. And expect the bill to rise: as home values and local budgets grow, tax bills typically climb a few percent a year, which is why escrow payments creep up over time.

How Home Insurance Fits In

Home insurance covers rebuilding after fire, storm, or other damage, plus liability if someone is hurt on the property. Lenders require it for the full life of the loan, and the premium is usually escrowed like tax. A typical premium runs $1,200 to $2,000 a year for a mid-priced home, but it depends on the home’s age, roof, location, and local disaster risk — a home in a hurricane or wildfire zone can cost two or three times the average.

Keeping Insurance Costs Down

• Shop every year. Premiums for identical cover can differ by hundreds of dollars between insurers.
• Bundle policies. Combining home and auto insurance with one company often saves 10% to 20%.
• Raise the deductible. Moving from a $500 to a $1,000 deductible usually cuts the premium noticeably.
• Ask about discounts. New roofs, security systems, and claims-free history all earn discounts.
• Cover rebuilding cost, not market price. Land is not insurable; insuring the full market price overpays.
• Check flood cover separately. Standard policies exclude flooding — a separate policy is needed in flood zones.

Remember that insurance premiums rise with rebuilding costs, so the escrow part of your payment tends to grow even when the loan part is fixed. The calculator’s insurance field is yours to change — put in a real quote, not a guess, before you rely on the total.

Escrow: How It Works Month to Month

Each month, the lender takes the tax and insurance parts of your payment — $292 and $125 in the default example, $417 together — and holds them in escrow. When the tax bill arrives, the lender pays it from escrow; same for the insurance premium. Once a year you get an escrow analysis: if the account collected too little, the monthly payment rises or you pay a lump sum; if it collected too much, you get a refund or a lower payment. Lenders may also keep a small cushion, usually up to two months of escrow payments, in the account.

Escrow surprises are the most common reason a “fixed” mortgage payment changes. A tax reassessment after a sale is a classic case: the home was taxed on an old value, the county reassesses at the sale price, and the tax bill jumps — sometimes by hundreds a month. Ask the seller for the last two years of tax bills, and check whether the assessed value is likely to jump after your purchase. A small reserve fund for an escrow shortage is cheap insurance against that surprise.

Worked Examples: Same Loan, Different Tax

The table below holds the loan fixed — $280,000 at 6.5% for 30 years, insurance $1,500 a year — and varies only the property tax. It shows how much of the monthly payment is really decided by the county, not the lender.

The gap between the cheapest and most expensive row is $1,499 a month for homes that cost the same to buy. Location is not a footnote in the monthly payment — it is one of the biggest lines in it. The tax calculator can help you see the federal tax side of the same income, while the salary calculator checks whether the PITI total fits your pay.

Common Mistakes

Most wrong mortgage numbers come from the same short list of errors. Check yours against it before trusting the result.

• Forgetting taxes and insurance. Principal and interest alone can understate the real monthly bill by $400 or more.
• Ignoring PMI. A down payment under 20% usually adds private mortgage insurance until the balance reaches 80% of the home value.
• Using the list price as the loan. The loan is the price minus the down payment — a $350,000 home with $70,000 down is a $280,000 loan.
• Comparing only the monthly payment. A 30-year loan looks cheaper per month but can cost $198,086 more in interest than a 15-year loan on the same balance.
• Forgetting HOA dues. Some homes carry $200 to $500 a month in association dues on top of PITI.
• Using a rate you cannot get. Advertised rates assume excellent credit; your actual rate depends on your credit score, down payment, and loan type.

Related Tools

Related tools on this site: the main mortgage calculator with taxes and insurance for a quick check, the salary calculator to test the payment against your income, the tax calculator to see the tax side of homeownership, and the compound interest calculator to compare saving for a down payment against investing.

Key Takeaways

If you remember nothing else from this page, remember these five points.

• The monthly payment is PITI — principal, interest, tax, and insurance — not just the loan. On the $350,000 example, PITI is $2,186 against $1,770 of principal and interest alone.
• The loan is the price minus the down payment: $350,000 minus $70,000 is a $280,000 loan.
• Twenty percent down avoids PMI; under 20%, PMI adds roughly $175 a month on a $280,000 loan.
• A 15-year term saves $198,086 of interest on the default loan but costs $669 more a month.
• The 28% rule: housing should stay under 28% of gross monthly income — a $2,186 payment fits about $93,698 a year.

Try It Yourself

1. Enter your home price and down payment in the calculator above.
2. Add your real annual tax and insurance figures, not guesses.
3. Compare the 15-year and 30-year totals in the comparison table.
4. Check the payment against your monthly income using the 28% rule.

Quick Reminders

• Always compare the full monthly total, including escrow — never principal and interest alone.
• Get a real insurance quote before relying on the total.
• Keep 3 to 6 months of payments in reserve after closing.
• Shop at least three lenders — a 0.5% lower rate saves about $91 a month on a $280,000 loan.

Run your own numbers in the calculator at the top of the page, and confirm the final figures with your lender before making an offer.

Monthly Cost by Loan Size

The table uses the same 6.5% rate and 30-year term, with property tax of $292 a month and insurance of $125 a month, and changes only the loan size. Figures are rounded to the nearest dollar.

Every extra $100,000 borrowed adds about $632 a month at this rate, while the tax and insurance column stays at $417 — so the loan size, not the escrow, is what sets the monthly cost.

Frequently Asked Questions

What is PITI in a mortgage?

PITI is principal, interest, taxes, and insurance — the four parts of a typical monthly mortgage payment. Tax and insurance are usually collected monthly into an escrow account and paid by the lender when the bills come due. PMI and HOA dues are separate charges on top of PITI.

How much are taxes and insurance on a $350,000 house?

At typical rates — 1% property tax and about $1,500 a year of insurance — tax is $3,500 a year ($292 a month) and insurance is $125 a month, $417 together. In a high-tax area the tax alone can be $583 a month or more. Always use the actual tax bill for the property, not an average.

Why does my escrow payment keep changing?

Escrow rises when property tax or insurance premiums rise. The lender re-analyses the account once a year and adjusts the monthly collection to cover the new bills plus a small cushion. A tax reassessment after a home sale is the most common cause of a large jump.

Can I pay taxes and insurance myself instead of escrow?

Often yes, if you have at least 20% equity — but the lender may charge a fee or a slightly higher rate for waiving escrow. Many borrowers keep escrow because it spreads two large annual bills into predictable monthly amounts.

Is PMI part of PITI?

No. PMI is a separate charge that applies when the down payment is under 20%. It is added to the monthly payment alongside PITI and usually ends once the loan balance reaches 80% of the home value.

Does the calculator include HOA dues?

Yes. The HOA field in the calculator adds monthly association dues to the total, since they are a real monthly cost of owning the home even though they are not part of the mortgage itself.

How is property tax calculated?

The assessed value of the home multiplied by the local tax rate. Rates vary from under 0.5% to over 2% of value a year depending on the area, so the same-priced home can cost hundreds more or less a month in different counties.

Can I remove escrow from my mortgage?

Often yes, if you have at least 20% equity — but the lender may charge a fee or a slightly higher rate. Many borrowers keep escrow because it spreads two large annual bills into predictable monthly amounts.

Disclaimer: This calculator gives estimates only and is not financial advice. Mortgage rates, taxes, insurance, and lender rules vary by location and credit profile. Confirm every figure with your lender before making a decision.