📖 Overview
Use this calculator to estimate true monthly ownership cost with tax and insurance included.
🧪 Example Scenarios
Use these default and higher-pressure example inputs to explore how sensitive this calculator is before using your real numbers.
| Input | Base Case | Higher Pressure Case |
|---|---|---|
| Loan Amount ($) | 450,000 | 517,500 |
| Annual Interest Rate (%) | 6.25 | 7.5 |
| Loan Term (years) | 30 | 34.5 |
| Annual Property Tax ($) | 5,400 | 6,210 |
| Annual Home Insurance ($) | 1,800 | 2,070 |
⚙️ How It Works
This combines principal and interest with estimated tax and insurance to model a fuller monthly housing cost.
The Formula
PITI = P&I Payment + (Annual Tax ÷ 12) + (Annual Insurance ÷ 12)
| P&I | Principal and interest from standard amortization formula |
| Tax / 12 | Monthly property tax estimate (annual ÷ 12) |
| Ins / 12 | Monthly homeowners insurance (annual ÷ 12) |
💡Most lenders want PITI below 28% of gross monthly income (the front-end DTI ratio). Always model PITI — not just the mortgage payment — when budgeting for a home purchase.
Quick Reference
| P&I / mo | Tax (1%/yr) | Insurance | PITI ($300k) |
|---|---|---|---|
| $1,610 (5%) | $250 | $100 | $1,960 |
| $1,799 (6%) | $250 | $100 | $2,149 |
| $1,996 (7%) | $250 | $100 | $2,346 |
| $2,197 (8%) | $250 | $100 | $2,547 |
When To Use This
- Use this tool when you need a fast decision during active planning or execution.
- Use this before committing money, time, or tradeoffs that are hard to reverse.
- Use this to compare options using the same assumptions across scenarios.
Edge Cases To Watch
- Results can be misleading if key inputs are missing, stale, or unrealistic.
- Very small or very large values may amplify rounding effects and interpretation risk.
- If assumptions change mid-decision, recalculate before acting.
Practical Tips
💡 Use current tax and insurance estimates from your area.
💡 Compare PITI, not only principal and interest, before committing.
💡 Run a best-case, base-case, and worst-case scenario before deciding.
💡 Use recent real values, not ideal assumptions, for better accuracy.
Frequently Asked Questions
❓ Why is PITI higher than mortgage payment?
PITI includes property tax and insurance on top of principal and interest.
❓ Can escrow changes affect this?
Yes, tax and insurance adjustments can change real monthly outflow.