This mortgage calculator with taxes and insurance shows more than the loan payment. It adds property tax, homeowners insurance, private mortgage insurance (PMI) and HOA dues to principal and interest, so you see what the home will really cost each month.
Mortgage payment with taxes and insurance
To add taxes and insurance by hand, divide the yearly property tax and the yearly insurance premium by 12, then add both to the principal and interest payment. For a $400,000 home with a 1.1% tax rate and $1,500 a year in insurance, that is $367 + $125 = $492 a month on top of the loan payment.
What is in a monthly mortgage payment
Lenders often describe the payment as PITI: principal, interest, taxes and insurance. This calculator adds the usual extras too:
- Principal and interest: repays the loan and pays the lender. It stays fixed on a fixed-rate mortgage.
- Property tax: set by your local government and usually collected monthly into an escrow account. Rates vary widely by county, so check the actual rate for the area you are considering.
- Homeowners insurance: required by lenders. Premiums depend on location, home value and coverage.
- PMI (private mortgage insurance): typically required on conventional loans when you put down less than 20%. It commonly costs somewhere between about 0.3% and 1.5% of the loan per year depending on your credit and down payment.
- HOA dues: only if the property belongs to a homeowners association.
Example
A $400,000 home with 20% down means a $320,000 loan. At 6.5% over 30 years, principal and interest come to about $2,023 a month. Add property tax at 1.1% ($367 a month) and $1,500 a year of insurance ($125 a month) and the full payment is about $2,514.
15-year versus 30-year
On that same $320,000 loan at 6.5%, a 15-year term costs about $2,788 a month, roughly $765 more than the 30-year payment. The reward is interest: about $182,000 over the life of the 15-year loan compared with about $408,000 over 30 years. Whether the higher payment is worth it depends on your budget and on what else you could do with the monthly difference. Lenders often quote a slightly lower rate on shorter terms, which you can test by changing the rate above.
Getting rid of PMI
PMI is not permanent. Under the U.S. Homeowners Protection Act, PMI on many conventional loans ends automatically when your balance is scheduled to reach 78% of the home's original value, and you can usually request removal earlier once you reach 20% equity. Ask your servicer for the exact rules on your loan.
What this estimate leaves out
Closing costs, moving costs, maintenance, utilities and any change in your tax or insurance bills are not included. A common rule of thumb is to budget an additional 1% of the home's value per year for maintenance. Treat the result as a planning estimate, not a loan offer.
Mortgage calculator with HOA
HOA dues do not change the amount you borrow, but they add to your monthly housing cost, and lenders count them when they check whether you can afford the payment. Enter the monthly fee in the HOA box above. On the example earlier in this page, $250 a month of HOA dues lifts the total from about $2,514 to about $2,764.