Mortgage Calculator With Taxes and Insurance: Complete PITI Breakdown 2026

Your monthly mortgage payment is much more than just principal and interest. Most homeowners pay PITI – Principal, Interest, Taxes, and Insurance – bundled into one monthly payment through escrow. Understanding and calculating your complete PITI payment is crucial for realistic budgeting and avoiding the shock of higher-than-expected housing costs.

This comprehensive guide shows you how to calculate every component of PITI, use our mortgage calculator to get accurate estimates, and plan for the full cost of homeownership.

What is PITI? The Four Components Explained

PITI is an acronym representing the four main components of your monthly housing payment:

P - Principal

The portion of your payment that reduces your loan balance.

Example: On a $300,000 loan at 7%, your first payment includes approximately $250 in principal.

I - Interest

The cost of borrowing money, paid to the lender.

Example: Same loan, first payment includes approximately $1,750 in interest.

T - Property Taxes

Annual property taxes divided into monthly payments, held in escrow by your lender.

Example: $6,000 annual property tax = $500/month

I - Insurance

Homeowners insurance (and possibly PMI) paid monthly through escrow.

Example: $1,200 annual homeowners insurance = $100/month

Total PITI: $250 + $1,750 + $500 + $100 = $2,600/month

This is your actual monthly housing cost – significantly more than just the $2,000 principal and interest payment.

How to Calculate Your Complete PITI Payment

Step 1: Calculate Principal & Interest (P&I)

Use our Mortgage Calculator to determine your base payment:

Example: $350,000 home purchase

• Down payment: 20% ($70,000)
• Loan amount: $280,000
• Interest rate: 7.0%
• Term: 30 years
• Monthly P&I: $1,862

Step 2: Estimate Property Taxes (T)

Property tax rates vary dramatically by location. Calculate yours:

Formula: (Home Value × Tax Rate) ÷ 12

Examples by State (2026 average rates):

• New Jersey (highest): $350,000 × 2.13% = $7,455/year = $621/month
• California: $350,000 × 0.71% = $2,485/year = $207/month
• Texas: $350,000 × 1.60% = $5,600/year = $467/month
• Florida: $350,000 × 0.80% = $2,800/year = $233/month
• Hawaii (lowest): $350,000 × 0.27% = $945/year = $79/month

How to find your rate: Google "[Your County] property tax rate" or check your county assessor's website. For existing homes, ask the seller for their annual tax bill.

Pro tip: Property taxes increase over time. In growing areas, expect 2-4% annual increases.

Step 3: Calculate Homeowners Insurance (I)

Homeowners insurance varies by:

• Home value and replacement cost
• Location (coastal, wildfire risk, tornado alley)
• Deductible chosen
• Coverage limits

National Averages (2026):

• $200,000 home: $1,000-$1,500/year = $83-$125/month
• $350,000 home: $1,500-$2,500/year = $125-$208/month
• $500,000 home: $2,000-$3,500/year = $167-$292/month
• $750,000+ home: $3,000-$6,000+/year = $250-$500+/month

High-risk areas (coastal Florida, California wildfire zones): Add 50-200%

How to get accurate estimate: Get quotes from 3-5 insurers (State Farm, Allstate, Progressive, Lemonade, Hippo) for the specific property address.

Step 4: Add PMI (If Applicable)

PMI (Private Mortgage Insurance) is required when down payment is less than 20%.

PMI rates: 0.3% to 1.5% of loan amount annually (rate depends on credit score)

Examples:

• $280,000 loan, good credit (740+): 0.5% PMI = $1,400/year = $117/month
• Same loan, fair credit (680): 1.0% PMI = $2,800/year = $233/month

How to calculate PMI: (Loan Amount × PMI Rate) ÷ 12 = Monthly PMI

When PMI ends: Once you reach 20% equity through payments or appreciation, you can request PMI removal. It automatically cancels at 22% equity.

Step 5: Calculate Total PITI

Add all components together:

Example: $350,000 home in Texas (moderate property tax state)

• Principal & Interest: $1,862
• Property Tax (1.6%): $467
• Homeowners Insurance: $175
• PMI (10% down, 0.75% rate): $196
• Total PITI: $2,700/month

The P&I alone was $1,862, but the actual payment is $2,700 – 45% higher!

Real-World PITI Examples by Price Range

Example 1: Starter Home - $250,000 (Austin, TX)

Loan Details:

• Purchase price: $250,000
• Down payment: 5% ($12,500) – FHA loan
• Loan amount: $237,500
• Interest rate: 6.5% (FHA)

PITI Breakdown:

• Principal & Interest: $1,501
• Property Tax (2.3% Texas): $479
• Homeowners Insurance: $145
• PMI (FHA MIP 0.85%): $168
• Total PITI: $2,293/month

Affordability Check: Requires minimum $8,000/month gross income (28% rule)

Example 2: Mid-Range Home - $450,000 (Denver, CO)

Loan Details:

• Purchase price: $450,000
• Down payment: 15% ($67,500)
• Loan amount: $382,500
• Interest rate: 7.0%

PITI Breakdown:

• Principal & Interest: $2,543
• Property Tax (0.5% Colorado): $188
• Homeowners Insurance: $195
• PMI (0.6% rate): $191
• Total PITI: $3,117/month

Affordability Check: Requires minimum $11,150/month gross income

Example 3: Luxury Home - $800,000 (San Diego, CA)

Loan Details:

• Purchase price: $800,000
• Down payment: 20% ($160,000) – no PMI
• Loan amount: $640,000
• Interest rate: 6.75%

PITI Breakdown:

• Principal & Interest: $4,150
• Property Tax (0.7% CA): $467
• Homeowners Insurance: $350
• PMI: $0 (20% down)
• Total PITI: $4,967/month

Affordability Check: Requires minimum $17,750/month gross income

Example 4: High-Tax State - $400,000 (New Jersey)

Loan Details:

• Purchase price: $400,000
• Down payment: 20% ($80,000)
• Loan amount: $320,000
• Interest rate: 7.0%

PITI Breakdown:

• Principal & Interest: $2,128
• Property Tax (2.2% NJ): $733 ⚠️
• Homeowners Insurance: $185
• PMI: $0
• Total PITI: $3,046/month

Note: Property tax alone is $733 – 34% of the total payment! This is why location matters enormously.

Example 5: Low-Tax State - $400,000 (Hawaii)

Loan Details:

• Purchase price: $400,000
• Down payment: 20% ($80,000)
• Loan amount: $320,000
• Interest rate: 7.0%

PITI Breakdown:

• Principal & Interest: $2,128
• Property Tax (0.27% HI): $90 ✓
• Homeowners Insurance: $275 (higher due to location)
• PMI: $0
• Total PITI: $2,493/month

Comparison: Same home price, but $553/month less than New Jersey due to lower property taxes!

How Escrow Works: Why You Pay PITI Monthly

Most lenders require an escrow account (also called impound account) where they:

1. Collect your property taxes and insurance premiums monthly
2. Hold the money in a separate account
3. Pay your tax bills and insurance premiums when due

Why Lenders Require Escrow

Lender's perspective: If you don't pay property taxes, the county can place a lien on the home ahead of the mortgage. If your home burns down with no insurance, their collateral is gone. Escrow protects their investment.

Your perspective: Escrow prevents you from being hit with a $6,000 tax bill twice a year or a $2,000 insurance bill annually. Instead, you pay $500/month and $167/month – spread evenly.

Escrow Cushion Requirements

Lenders typically require a cushion of 2-3 months of taxes and insurance in your escrow account at all times.

At closing, you'll pay:

• 2-3 months of property taxes upfront
• 2-3 months of insurance upfront
• First year's insurance premium in full
• Property taxes prorated from closing date to next tax due date

Example: Closing on $400,000 home on June 1

• Annual property taxes: $6,000 ($500/month)
• Annual insurance: $1,800 ($150/month)

Escrow required at closing:

• Insurance premium for 12 months: $1,800
• 2 months insurance escrow: $300
• 6 months property tax (June-Dec): $3,000
• Total escrow at closing: $5,100

This is in addition to your down payment and closing costs – a surprise for many buyers!

Annual Escrow Analysis

Each year, your lender performs an escrow analysis comparing:

• What they collected from you
• What they actually paid for taxes and insurance
• Whether your escrow account has the required cushion

If taxes/insurance increased: Your monthly PITI payment increases If taxes/insurance decreased: Your monthly payment decreases (rare) If escrow is short: You may owe a lump sum or see a larger payment increase If escrow has surplus: You get a refund check (if over $50 typically)

Reality check: Property taxes and insurance usually increase 2-5% annually. Expect your PITI payment to rise even though your P&I portion stays the same.

Hidden Costs Beyond PITI

PITI isn't the complete picture. Factor in these additional costs:

HOA Fees (Homeowners Association)

• Condos: $200-$700/month typical
• Planned communities: $50-$300/month
• Luxury communities: $500-$2,000+/month

What HOA covers: Exterior maintenance, landscaping, amenities (pool, gym), insurance on building exteriors (condos)

Utilities

• Electric: $80-$250/month
• Gas: $30-$150/month
• Water/Sewer: $40-$100/month
• Trash: $15-$40/month
• Total utilities: $165-$540/month

Maintenance & Repairs

1% rule: Budget 1% of home value annually for maintenance

• $300,000 home: $3,000/year = $250/month
• $500,000 home: $5,000/year = $417/month

Major upcoming expenses:

• Roof replacement: $8,000-$20,000 (every 20-30 years)
• HVAC replacement: $5,000-$10,000 (every 15-20 years)
• Water heater: $1,200-$2,500 (every 10-12 years)

True Monthly Housing Cost Example

$400,000 home in Texas:

• PITI: $3,046
• HOA: $150
• Utilities: $300
• Maintenance fund: $333
• Total monthly housing cost: $3,829

That's 26% higher than PITI alone! Use this complete picture for budgeting

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How to Use Our Calculator for PITI

Our Mortgage Calculator helps you calculate complete PITI payments:

Step 1: Enter Loan Details

• Home price: Enter purchase price
• Down payment: Enter as percentage or dollar amount
• Interest rate: Your quoted rate from lender
• Loan term: 30, 20, or 15 years

Step 2: Add Property Taxes

• Enter annual property tax amount OR
• Enter property tax rate (as percentage)
• Calculator divides by 12 for monthly amount

Step 3: Add Insurance

• Enter annual homeowners insurance premium
• Add PMI if down payment under 20%

Step 4: Review PITI Breakdown

The calculator shows:

• Monthly principal & interest
• Monthly property tax
• Monthly insurance
• Monthly PMI (if applicable)
• Total monthly PITI payment

Step 5: Check Affordability

Compare PITI to your gross monthly income:

• Front-end ratio: PITI ÷ Gross Income should be ≤ 28%
• Example: $3,000 PITI requires $10,714+ monthly gross income

Strategies to Lower Your PITI Payment

Reduce Principal & Interest

• Larger down payment: 20%+ eliminates PMI and reduces loan amount
• Better credit score: 740+ gets best rates (up to 1% lower)
• Shop lenders: Rates vary by 0.25-0.5% between lenders
• Buy rate down: Pay points to lower interest rate
• Choose longer term: 30-year vs 15-year lowers P&I but increases total interest

Reduce Property Taxes

• Challenge assessment: If home is overvalued, appeal to assessor
• Homestead exemption: Many states offer exemptions reducing taxable value
• Senior/veteran exemptions: Special reductions if you qualify
• Buy in low-tax area: Texas vs Hawaii is 6x difference in taxes

Reality: Property taxes are largely fixed based on location. You can't significantly reduce them long-term.

Reduce Insurance

• Shop annually: Get 3-5 quotes every year
• Increase deductible: $1,000 → $2,500 deductible can save 10-15%
• Bundle policies: Home + auto with same insurer saves 10-25%
• Improve home: Security system, impact windows lower premiums
• Maintain good credit: Insurers use credit-based insurance scores

Eliminate PMI Early

• Reach 20% equity: Make extra payments to hit 20% equity faster
• Request PMI removal: Once at 20% equity, formally request removal
• Refinance: If home appreciates quickly, refinance at new valuation
• Automatic removal: PMI cancels automatically at 22% equity by law

Example: $300,000 loan with $200/month PMI

• Make $300/month extra payments
• Reach 20% equity in 3.5 years (vs 9 years normally)
• Save: $200 × 66 months = $13,200

Tax Deduction for Property Taxes and Mortgage Interest

What's Deductible (2026 Tax Law)

• Mortgage interest: On loans up to $750,000
• Property taxes: Up to $10,000 total (SALT cap includes state income tax too)

Who Benefits from Deductions

You must itemize to deduct, which requires total itemized deductions exceeding:

• $30,000 standard deduction (married filing jointly, 2026)
• $15,000 standard deduction (single, 2026)

Example: Do You Benefit?

Scenario 1 – $400,000 home, Texas

• Mortgage interest (Year 1): $19,600
• Property taxes: $6,400
• Charitable giving: $2,000
• Total itemized: $28,000

Result: Take standard deduction ($30,000) instead. Mortgage interest provides no tax benefit.

Scenario 2 – $650,000 home, California

• Mortgage interest (Year 1): $34,125
• Property taxes: $10,000 (SALT cap)
• State income tax: Already hit $10K SALT cap ($0 additional)
• Charitable giving: $5,000
• Total itemized: $49,125

Result: Itemize and deduct $49,125. Mortgage interest provides tax benefit.

Savings (24% tax bracket): $49,125 × 24% = $11,790 vs $30,000 × 24% = $7,200 → $4,590/year extra tax savings

The Reality

Most middle-class homeowners with mortgages under $400,000 don't benefit from mortgage interest deductions due to the high standard deduction. Don't let "tax deductions" drive your home purchase decision – they're less valuable than people think.

Affordability Rules: How Much PITI Can You Afford?

Lenders use two key ratios:

Front-End Ratio (Housing Ratio)

Formula: PITI ÷ Gross Monthly Income ≤ 28%

Example: Gross income $8,000/month

• Maximum PITI: $8,000 × 28% = $2,240

What this means: With $8,000 monthly gross income, lenders typically approve up to $2,240 monthly PITI.

Back-End Ratio (Debt-to-Income Ratio)

Formula: (PITI + All Debt Payments) ÷ Gross Monthly Income ≤ 36-43%

Example: Gross income $8,000/month, $500 car loan, $200 student loan

• Maximum PITI: ($8,000 × 43%) - $700 = $2,740

What this means: Your housing + all debts can't exceed 43% of income (varies by loan type).

Conservative Affordability Rule

Our recommendation: Keep PITI at 25% or less of gross income for comfortable budgeting with emergency savings and retirement contributions.

Example: $10,000/month gross income

• Lender approves: $2,800-$3,500 PITI (28-35%)
• Comfortable maximum: $2,500 PITI (25%)
• Safety buffer: $300-$1,000/month for savings, unexpected costs

Common PITI Mistakes First-Time Buyers Make

Mistake 1: Not Including Taxes and Insurance in Budget

The error: Qualifying for $2,000/month payment, thinking that's the complete cost

The reality: $2,000 is P&I only. Actual PITI is $2,700 – 35% higher

The fix: Always calculate and budget for full PITI before house hunting

Mistake 2: Not Shopping Property Taxes

The error: Buying based on home price without checking property tax rates

The reality: Same $400K home costs $400/month more in New Jersey vs Hawaii

The fix: Research property tax rates early. Use our calculator to compare locations.

Mistake 3: Expecting PMI to Disappear Quickly

The error: "I'll just pay PMI for a year or two, no big deal"

The reality: At normal payment pace, you won't hit 20% equity for 8-10 years

The fix: Either save 20% down or make aggressive extra payments to eliminate PMI within 2-3 years

Mistake 4: Not Planning for Escrow Increases

The error: Budgeting exactly $2,400/month PITI with no cushion

The reality: Property taxes increase 3%, insurance 5% next year → PITI jumps to $2,510

The fix: Budget 5-10% higher than current PITI to handle annual increases

Mistake 5: Forgetting Closing Cost Escrow Requirements

The error: Having exactly 20% down saved, nothing more

The reality: You also need 2-3 months of escrow prepaid at closing ($2,000-$4,000 extra)

The fix: Save 22-23% of home price total to cover down payment + escrow + closing costs

Frequently Asked Questions

Q: Can I pay my property taxes and insurance myself instead of through escrow?

A: Only if you have 20%+ equity (for most conventional loans). With less than 20% equity or with FHA/VA loans, lenders require escrow. Once you have 20%+ equity, you can request escrow waiver, but the lender can charge a 0.125-0.25% higher interest rate.

Q: What happens if my property tax bill is higher than the lender estimated?

A: Your lender will pay the full amount from escrow. If this creates a shortfall, you'll either pay a lump sum to replenish escrow or your monthly payment increases to catch up over 12 months. This is why escrow analysis happens annually.

Q: Why did my PITI payment increase even though I have a fixed-rate mortgage?

A: Your principal and interest (P&I) payment is fixed, but property taxes and insurance premiums increase over time. These increases are passed through to your monthly PITI payment.

Q: Do I get interest on money sitting in my escrow account?

A: In most states, no. About 14 states require lenders to pay interest on escrow balances, but the interest rate is minimal (1-2%). Don't expect meaningful earnings from escrow.

Q: Can I use last year's property tax bill to estimate this year's?

A: It's a starting point, but taxes often change when: (1) home sells (reassessment), (2) you make improvements, (3) tax rates increase. For new construction, the developed lot value may be much higher than previous empty lot taxes. Ask your lender or real estate agent for accurate estimates.

Conclusion: Master Your PITI for Accurate Home Budgeting

Understanding PITI – the complete monthly housing payment including Principal, Interest, Taxes, and Insurance – is essential for realistic home affordability planning. Many buyers focus only on the principal and interest payment, then get shocked by the actual monthly cost being 30-50% higher.

Your action plan:

1. Calculate your full PITI using our Mortgage Calculator – don't just look at P&I
2. Research property taxes in your target area – this varies wildly by location
3. Get insurance quotes for actual properties you're considering
4. Budget for escrow at closing – you'll need 2-3 months prepaid
5. Apply the 25-28% rule – keep PITI at or below 25-28% of gross income
6. Plan for increases – taxes and insurance rise over time

Remember: Your mortgage payment isn't just your mortgage payment. It's PITI, plus HOA fees, plus utilities, plus maintenance. The more accurately you calculate the true cost of homeownership, the better financial decision you'll make.

Ready to calculate your complete PITI payment? Use our Mortgage Calculator now with taxes and insurance included.

Related calculators:

• Home Affordability Calculator – How much home can you really afford?
• Mortgage Refinance Calculator – Should you refinance?
• Budget Calculator – Does your PITI fit your budget?