How to Calculate Total Tax Rate

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Advanced Mortgage Payment Calculator

30 Years Fixed 20 Years Fixed 15 Years Fixed 10 Years Fixed

Estimated Monthly Payment

Principal & Interest:
Property Taxes:
Home Insurance:
PMI (Private Mortgage Insurance):
function calculateMortgage() { var homePrice = parseFloat(document.getElementById('homePrice').value); var downPayment = parseFloat(document.getElementById('downPayment').value); var annualRate = parseFloat(document.getElementById('interestRate').value); var loanTermYears = parseInt(document.getElementById('loanTerm').value); var annualTax = parseFloat(document.getElementById('propertyTax').value); var annualInsurance = parseFloat(document.getElementById('homeInsurance').value); if (isNaN(homePrice) || isNaN(downPayment) || isNaN(annualRate) || homePrice <= 0) { alert("Please enter valid numbers for the home price, down payment, and interest rate."); return; } var principal = homePrice – downPayment; if (principal <= 0) { alert("Down payment cannot be greater than or equal to the home price."); return; } var monthlyRate = (annualRate / 100) / 12; var numberOfPayments = loanTermYears * 12; // Monthly Principal & Interest Formula: P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ] var monthlyPI = 0; if (monthlyRate === 0) { monthlyPI = principal / numberOfPayments; } else { monthlyPI = principal * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1); } var monthlyTax = annualTax / 12; var monthlyInsurance = annualInsurance / 12; // PMI Calculation (Estimating 0.5% annual rate if down payment < 20%) var monthlyPMI = 0; if ((downPayment / homePrice) < 0.20) { monthlyPMI = (principal * 0.005) / 12; document.getElementById('pmiRow').style.display = 'flex'; } else { document.getElementById('pmiRow').style.display = 'none'; } var totalMonthly = monthlyPI + monthlyTax + monthlyInsurance + monthlyPMI; document.getElementById('monthlyTotal').innerText = "$" + totalMonthly.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('breakdownPI').innerText = "$" + monthlyPI.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('breakdownTax').innerText = "$" + monthlyTax.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('breakdownInsurance').innerText = "$" + monthlyInsurance.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('breakdownPMI').innerText = "$" + monthlyPMI.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resultArea').style.display = 'block'; }

Understanding Your Mortgage Payment (PITI)

When calculating your monthly budget for a new home, looking only at the Principal and Interest is a common mistake. Most lenders require an escrow account to cover other essential costs. This is often referred to as PITI:

  • Principal: The actual amount going toward paying off your loan balance.
  • Interest: The cost paid to the lender for borrowing the money.
  • Taxes: Real estate property taxes charged by your local government.
  • Insurance: Homeowners insurance to protect the property against hazards.

How Down Payments Affect PMI

If you put down less than 20% of the home's purchase price, lenders typically require Private Mortgage Insurance (PMI). This insurance protects the lender if you default on the loan. Our calculator estimates PMI at roughly 0.5% of the loan amount annually, though this varies based on your credit score.

Practical Mortgage Example

Example: For a $400,000 home with a $80,000 (20%) down payment at a 6.5% interest rate on a 30-year term:

  • Loan Amount: $320,000
  • Monthly Principal & Interest: $2,022.62
  • Estimated Property Tax ($4,800/yr): $400.00
  • Estimated Insurance ($1,200/yr): $100.00
  • Total Monthly Payment: $2,522.62

Tips for Lowering Your Payment

  1. Improve Your Credit Score: Even a 0.5% reduction in your interest rate can save tens of thousands of dollars over the life of the loan.
  2. Increase Your Down Payment: Reaching the 20% threshold eliminates the need for monthly PMI payments.
  3. Consider a Longer Term: A 30-year loan has lower monthly payments than a 15-year loan, though you will pay more in total interest.
  4. Shop for Insurance: Rates vary significantly between providers; getting multiple quotes can lower your monthly escrow cost.

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