House Payment Calculator
Calculate your estimated total monthly house payment (PITI). Plan principal, interest, property taxes, homeowners insurance, HOA, and PMI.
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What is a Monthly House Payment?
A monthly House Payment is the combined total amount you pay each month to cover your home loan debt, property taxes, homeowners insurance, and other related housing fees. This is often referred to in the mortgage industry by the acronym **PITI**.
Many homebuyers make the mistake of budgeting based solely on their principal and interest (P&I) payment. However, taxes, homeowners insurance, private mortgage insurance (PMI), and homeowners association (HOA) fees can increase your true monthly cash output by 20% to 40% or more. This house payment calculator provides an itemized breakdown of your entire housing bill.
What Does PITI Stand For?
PITI represents the four core components of a monthly mortgage bill:
- Principal (P): The portion of your payment that directly reduces your outstanding loan balance.
- Interest (I): The fee charged by the lender for borrowing the money.
- Taxes (T): Local property taxes, which are typically collected monthly by the lender and held in an escrow account to pay your county tax bills annually.
- Insurance (I): Homeowners insurance premiums, which are also collected monthly into your escrow account. If you make a down payment of less than 20%, this also includes monthly Private Mortgage Insurance (PMI).
Step-by-Step House Payment Example
Imagine you buy a home for $350,000 with a 20% down payment ($70,000), leaving a loan balance of $280,000. Your interest rate is 6.5%, annual property taxes are 1.2%, annual insurance is $1,200, and there are no HOA fees:
- Calculate Principal & Interest (P&I): At 6.5% over 30 years, your payment is $1,769.79.
- Calculate Monthly Property Tax: \((350,000 \times 1.2\%) / 12 = \mathbf{\$350.00}\) per month.
- Calculate Monthly Homeowners Insurance: \(\$1,200 / 12 = \mathbf{\$100.00}\) per month.
- Calculate Monthly PMI: Since your down payment is 20%, LTV is exactly 80%, meaning PMI is $0.00.
- Calculate Total Monthly Payment (PITI): \(1,769.79 + 350.00 + 100.00 = \mathbf{\$2,219.79}\) per month.
Frequently Asked Questions (FAQ)
What does PITI stand for?
PITI stands for Principal, Interest, Taxes, and Insurance. These are the four primary components that make up a standard monthly mortgage payment.
How are property taxes calculated on a monthly mortgage payment?
Property taxes are calculated as an annual percentage of your home's assessed value. Lenders divide this annual amount by 12, collection it monthly as part of your escrow account, and pay the county directly when the tax bill is due.
Do homeowners association (HOA) fees get paid through my mortgage?
No. HOA fees are paid directly to the homeowners association, not the mortgage servicer. However, lenders still count HOA fees when calculating your debt-to-income (DTI) ratio to check if you qualify for the loan.
What is an escrow account?
An escrow account is a neutral holding account managed by your mortgage lender. A portion of your monthly payment is placed in escrow to cover annual property taxes and homeowners insurance premiums when they become due.
Why does my monthly mortgage payment change?
Even if you have a fixed-rate mortgage, your monthly payment can adjust if your property taxes or homeowners insurance premiums change. Lenders perform an annual escrow analysis and adjust your payment to match the new rates.
Can LTV affect my monthly house payment?
Yes. If your Loan-to-Value (LTV) ratio is higher than 80% (meaning you put less than 20% down), you will be required to pay Private Mortgage Insurance (PMI), which adds an extra fee to your monthly bill.
How can I lower my monthly house payment?
You can lower your monthly payment by making a larger down payment, shopping for a lower homeowners insurance rate, appealing your local property tax assessment, or refinancing your mortgage to a lower interest rate.
What is the difference between principal and interest?
Principal is the money that pays down your original loan balance, helping you build home equity. Interest is the profit the lender charges for borrowing the money, which does not build equity.
Is homeowners insurance mandatory for a mortgage?
Yes. All mortgage lenders require you to carry homeowners hazard insurance to protect their collateral (the home) from fire, storms, and other property damage.
Does the monthly house payment include utilities?
No. Monthly mortgage payments never include home utilities like water, electricity, trash, gas, or internet. You must budget for these expenses separately.