Mortgage Calculator with Taxes

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mortgage calculator with taxes
Calculate Monthly Payment (PITI)
Results:
function calculateMortgage(){var price=parseFloat(document.getElementById('home_price').value);var down=parseFloat(document.getElementById('down_payment').value);var annualRate=parseFloat(document.getElementById('interest_rate').value);var years=parseFloat(document.getElementById('loan_term').value);var annualTax=parseFloat(document.getElementById('annual_tax').value);var annualIns=parseFloat(document.getElementById('annual_ins').value);if(isNaN(price)||isNaN(down)||isNaN(annualRate)||isNaN(years)){alert('Please fill in the home price, down payment, interest rate, and term.');return;}var principal=price-down;var monthlyRate=annualRate/100/12;var totalPayments=years*12;var mPI=0;if(monthlyRate===0){mPI=principal/totalPayments;}else{var factor=Math.pow(1+monthlyRate,totalPayments);mPI=principal*(monthlyRate*factor)/(factor-1);}var mTax=annualTax/12||0;var mIns=annualIns/12||0;var totalMonthly=mPI+mTax+mIns;document.getElementById('summaryResult').innerHTML='Total Monthly Payment: $'+totalMonthly.toLocaleString(undefined,{minimumFractionDigits:2,maximumFractionDigits:2});if(document.getElementById('steps').checked){var html='
';html+='Monthly Principal & Interest: $'+mPI.toLocaleString(undefined,{minimumFractionDigits:2,maximumFractionDigits:2})+'
';html+='Monthly Property Taxes: $'+mTax.toLocaleString(undefined,{minimumFractionDigits:2,maximumFractionDigits:2})+'
';html+='Monthly Home Insurance: $'+mIns.toLocaleString(undefined,{minimumFractionDigits:2,maximumFractionDigits:2})+'
';html+='
';html+='Loan Amount: $'+principal.toLocaleString()+'
';html+='Total Payments: '+totalPayments+'
';document.getElementById('breakdownResult').innerHTML=html;}else{document.getElementById('breakdownResult').innerHTML=";}}

Calculator Use

This mortgage calculator with taxes is designed to provide home buyers with a realistic view of their future monthly housing costs. Unlike a basic loan calculator that only looks at principal and interest, this tool incorporates essential "hidden" costs like property taxes and homeowners insurance.

By including these escrow items, you can better estimate your PITI (Principal, Interest, Taxes, and Insurance), ensuring your debt-to-income ratio remains healthy and your budget is accurate.

Home Price
The total purchase price of the property.
Down Payment
The initial cash payment you make toward the home. The loan amount will be the price minus this value.
Interest Rate
The annual interest percentage charged by the lender.
Annual Property Tax
The total yearly tax levied by your local municipality or county on the property.

How It Works

The calculator uses the standard amortization formula to determine the monthly principal and interest (P&I). It then divides your annual tax and insurance bills by 12 to find the monthly escrow requirement. The final total is the sum of these components.

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ] + (Annual Taxes / 12) + (Annual Insurance / 12)

  • M: Total monthly payment (PITI)
  • P: Principal loan amount (Home Price – Down Payment)
  • i: Monthly interest rate (Annual Rate / 12)
  • n: Total number of months (Years * 12)

Calculation Example

Example: Imagine you are buying a home for $400,000 with a $80,000 down payment. You secure a 30-year fixed rate at 7%. Your local property taxes are $4,800 per year, and insurance is $1,200 per year.

Step-by-step solution:

  1. Loan Amount: $400,000 – $80,000 = $320,000
  2. Monthly P&I: $320,000 * [0.005833(1.005833)^360] / [(1.005833)^360 – 1] = $2,128.98
  3. Monthly Tax: $4,800 / 12 = $400.00
  4. Monthly Insurance: $1,200 / 12 = $100.00
  5. Total Payment: $2,128.98 + $400 + $100 = $2,628.98 per month

Common Questions

Why do I need a mortgage calculator with taxes?

Many buyers focus only on the loan repayment. However, property taxes and insurance can easily add $300 to $800+ to your monthly bill. If you ignore these, you might overextend your budget and struggle to make payments later.

What is an escrow account?

An escrow account is a specialized account held by your lender. Each month, a portion of your payment (the tax and insurance part) is placed into this account. When the tax bill or insurance premium comes due, the lender pays it on your behalf using the accumulated funds.

Do property taxes ever change?

Yes. Local governments reassess property values periodically. If your home's assessed value increases or the local tax rate goes up, your monthly mortgage payment will increase to cover the higher tax bill. Using this mortgage calculator with taxes periodically can help you prepare for such adjustments.

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