1. What is a Mortgage Payment?

A mortgage payment typically consists of four components: principal, interest, property taxes, and homeowners insurance (often abbreviated as PITI). This calculator helps you estimate your total monthly housing payment.

2. How Does the Calculator Work?

The calculator uses the following formulas:

Where:

• \( PI \) — Principal and interest payment
• \( L \) — Loan amount
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (term in years × 12)
• \( Tax \) — Annual property tax
• \( Ins \) — Annual homeowners insurance

3. Importance of Including Taxes and Insurance

Details: Property taxes and insurance can significantly impact your total monthly housing costs. Many lenders require you to escrow these amounts with your mortgage payment.

4. Using the Calculator

Tips: Enter the loan amount, interest rate, loan term, annual property tax, and annual homeowners insurance. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's included in a typical mortgage payment?
A: Principal, interest, property taxes, and homeowners insurance (PITI). Some loans may also include mortgage insurance.

Q2: How often do property taxes change?
A: Property taxes typically change annually based on local assessments and tax rates.

Q3: What affects homeowners insurance rates?
A: Home value, location, construction type, coverage amounts, and deductible all affect insurance rates.

Q4: Why is my total payment higher than just principal and interest?
A: Taxes and insurance add to your monthly costs - this is your true housing payment amount.

Q5: Can I pay taxes and insurance separately?
A: Some lenders allow this, but most require escrow accounts for these payments.