Calculate Average Tax Rate Formula

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Mortgage Payment Calculator (PITI)

Calculate your monthly P&I, tax, insurance, and HOA.

Total Monthly Payment
$0.00
Principal & Interest $0.00
Property Tax (Monthly) $0.00
Homeowner's Insurance (Monthly) $0.00
HOA Fees $0.00
Loan Amount $0.00

Understanding Your Mortgage Payment

When buying a home, the sticker price is just the beginning. Understanding your monthly financial commitment is crucial for long-term financial stability. This Mortgage PITI Calculator breaks down your monthly costs into the four key components that lenders look at: Principal, Interest, Taxes, and Insurance.

What is PITI?

PITI stands for Principal, Interest, Taxes, and Insurance. These are the four main elements that make up your monthly mortgage payment:

  • Principal: The portion of your payment that goes toward paying down the original loan balance. In the early years of a mortgage, this amount is small but grows over time.
  • Interest: The cost of borrowing money from the lender. In the beginning of your loan term, interest makes up the majority of your payment.
  • Taxes: Property taxes assessed by your local government. Lenders often collect this monthly and hold it in an escrow account to pay the bill annually on your behalf.
  • Insurance: Homeowners insurance protects your property against damage. Like taxes, this is usually collected monthly into an escrow account.

How to Calculate Mortgage Payments

While our calculator handles the math instantly, understanding the formula can be helpful. The core calculation for Principal and Interest is based on the amortization formula:

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]

Where:

  • M = Total monthly payment
  • P = The principal loan amount (Home Price minus Down Payment)
  • i = Monthly interest rate (Annual rate divided by 12)
  • n = Number of payments (Loan term in years multiplied by 12)

Example Calculation

Let's look at a realistic scenario for a home purchase:

  • Home Price: $400,000
  • Down Payment: 20% ($80,000)
  • Loan Amount: $320,000
  • Interest Rate: 6.5%
  • Term: 30 Years

Using the formula, the Principal & Interest payment would be approximately $2,022. However, if you add Property Taxes ($5,000/year) and Insurance ($1,200/year), your actual monthly check written to the bank would be closer to $2,539.

Frequently Asked Questions

Does this calculator include PMI?

Private Mortgage Insurance (PMI) is typically required if your down payment is less than 20%. While this specific calculator focuses on PITI and HOA, remember that PMI can add 0.5% to 1% of the loan amount annually to your costs until you reach 20% equity.

How do interest rates affect my buying power?

Interest rates have a massive impact on affordability. A 1% increase in interest rates can reduce your buying power by roughly 10%, keeping your monthly payment the same.

What is a good Debt-to-Income (DTI) ratio?

Lenders prefer your total monthly debt payments (including the new mortgage) to be no more than 36% to 43% of your gross monthly income. This calculator helps you see exactly what that mortgage portion will look like.

function calculateMortgage() { // 1. Get input values var homePrice = parseFloat(document.getElementById('homePrice').value); var downPayment = parseFloat(document.getElementById('downPayment').value); var interestRate = parseFloat(document.getElementById('interestRate').value); var loanTerm = parseFloat(document.getElementById('loanTerm').value); var propertyTax = parseFloat(document.getElementById('propertyTax').value); var insurance = parseFloat(document.getElementById('insurance').value); var hoaFees = parseFloat(document.getElementById('hoaFees').value); // 2. Validation if (isNaN(homePrice) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm)) { alert("Please enter valid numbers for the loan details."); return; } // Handle defaults for optional fields if empty/NaN if (isNaN(propertyTax)) propertyTax = 0; if (isNaN(insurance)) insurance = 0; if (isNaN(hoaFees)) hoaFees = 0; // 3. Principal Calculation var principal = homePrice – downPayment; // 4. Monthly Interest Rate and Number of Payments var monthlyRate = (interestRate / 100) / 12; var numberOfPayments = loanTerm * 12; // 5. Calculate Principal & Interest (P&I) // Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ] var monthlyPI = 0; if (interestRate === 0) { monthlyPI = principal / numberOfPayments; } else { monthlyPI = principal * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1); } // 6. Calculate Monthly Tax and Insurance var monthlyTax = propertyTax / 12; var monthlyInsurance = insurance / 12; // 7. Calculate Total Monthly Payment var totalPayment = monthlyPI + monthlyTax + monthlyInsurance + hoaFees; // 8. Display Results // Format as currency var formatter = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD', }); document.getElementById('totalMonthlyPayment').innerHTML = formatter.format(totalPayment); document.getElementById('piResult').innerHTML = formatter.format(monthlyPI); document.getElementById('taxResult').innerHTML = formatter.format(monthlyTax); document.getElementById('insuranceResult').innerHTML = formatter.format(monthlyInsurance); document.getElementById('hoaResult').innerHTML = formatter.format(hoaFees); document.getElementById('loanAmountResult').innerHTML = formatter.format(principal); // Show results area document.getElementById('results-area').style.display = 'block'; }

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