What This Calculator Does
This Mortgage Payment Calculator with Taxes and Insurance estimates your true monthly housing cost. A bank's quoted "payment" usually only covers principal and interest (P+I), but most homeowners with an escrow account also pay monthly property tax and homeowners insurance bundled into one payment. This tool combines all three so you know the real number. It is a universal time-value-of-money calculation; the dollar sign is simply the display currency and the math applies to any fixed-rate loan.
How to Use It
Enter the mortgage amount (the loan principal), the term (and whether it is in years or months), and the annual interest rate as a percentage. Optionally add the yearly property taxes and yearly homeowners insurance; leave them blank or zero if you only want principal and interest. The calculator converts the term to a number of monthly payments and the annual rate to a monthly decimal rate, then returns the breakdown and the combined total.
The Formula Explained
The monthly principal and interest uses the standard amortizing-loan (annuity) formula:
$$\text{PI} = P \times \frac{i(1+i)^n}{(1+i)^n - 1}$$where \(P\) is the loan amount, \(i\) is the monthly rate (annual rate \(/ 100 / 12\)), and \(n\) is the number of monthly payments (years \(\times 12\)). If the interest rate is zero, the denominator vanishes, so we fall back to \(\text{PI} = P / n\). Monthly tax is annual taxes \(/ 12\) and monthly insurance is annual insurance \(/ 12\). The total is simply the sum of the three.
Worked Example
For a $175,000 loan over 30 years at 4.1250%, with $3,200 annual taxes and $520 annual insurance: \(n = 360\), \(i = 0.0034375\), and \((1+i)^{360} = 3.4342\).
$$\text{PI} = 175000 \times \frac{0.0034375 \times 3.4342}{3.4342 - 1} = \$848.14$$Monthly tax \(= 3200 / 12 = \$266.67\) and monthly insurance \(= 520 / 12 = \$43.33\).
$$\text{Total} = 848.14 + 266.67 + 43.33 = \$1{,}158.14$$FAQ
Does this include PMI or HOA fees? No. It covers principal, interest, property tax and homeowners insurance. Add private mortgage insurance or HOA dues separately if they apply.
What if I don't escrow taxes and insurance? Just leave those fields at 0 and the total equals the principal and interest payment.
Why is my actual payment slightly different? Lenders round and your escrow amounts can change each year as tax assessments and premiums update. This is a precise estimate based on the figures you enter.
