Mortgage Calculator With Taxes And Insurance (PITI)

What PITI Actually Includes

PITI breaks down into four costs that the lender bundles into one monthly withdrawal:

• Principal — the amount you are repaying of the loan itself.
• Interest — the lender's fee on the remaining balance each month.
• Taxes — property tax paid to your local government.
• Insurance — homeowners insurance and (if under 20% down) private mortgage insurance.

In the US, these are typically collected in a single monthly payment via an escrow account and distributed to the relevant parties. In the UK, council tax is paid separately to the council — so UK "mortgage" payments usually only include principal and interest. We will cover both.

The Monthly Payment Formula

Principal + interest use the standard mortgage formula: M = P × [r(1+r)^n] / [(1+r)^n − 1], where P = loan, r = monthly rate (APR ÷ 12), n = total months.

Worked example: $360,000 loan at 6.5% over 30 years = $2,275/month principal + interest. That is the advertised "monthly mortgage payment". The real figure is higher.

Adding Property Taxes to the Monthly Payment

US property taxes average 1.1% of home value per year nationally, but vary wildly:

• New Jersey: 2.23% — highest in the US
• Illinois: 2.05%
• Texas: 1.60%
• Florida: 0.80%
• Hawaii: 0.28% — lowest

Worked example (Texas): $450,000 home × 1.6% = $7,200/year property tax = $600/month added to PITI.

UK: Council tax replaces US property tax but is paid separately. Band D council tax averages £2,200/year across England in 2026. It is not included in mortgage payments — budget for it separately.

Homeowners Insurance

Standard homeowners insurance in the US averages $1,800/year in 2026 — roughly $150/month. It varies by state (Florida and California run 2–3× the national average due to hurricane/wildfire risk). Lenders require it and include it in the escrow payment.

UK: Buildings insurance is mandatory if you have a mortgage (required by the lender). Average cost £250–400/year. Contents insurance is optional but recommended — another £150–200/year.

PMI: The Cost of Putting Less Than 20% Down

In the US, Private Mortgage Insurance (PMI) is required when your down payment is below 20%. It costs 0.5–1.5% of the loan balance annually.

Worked example: $360,000 loan × 1% PMI = $3,600/year = $300/month added until you reach 20% equity.

PMI falls off automatically at 22% equity under the US Homeowners Protection Act. You can request cancellation at 20% equity. For a typical home appreciating 3–4%/year, this happens around year 5–7.

UK equivalent: no formal PMI system. Instead, high-LTV mortgages (90–95%) carry higher interest rates, bundling the insurance premium into the rate. Once you remortgage at 75% LTV, rates drop sharply.

HOA Fees and Leasehold Costs

US condo/HOA fees average $300/month nationally and can reach $1,000+ in luxury buildings. Not included in mortgage payments but due monthly.

UK leasehold service charges on flats typically £1,500–4,000/year. Ground rent on older leases can add £200–400/year. Always check leasehold charges before buying — they can meaningfully shift affordability.

Putting It All Together: Real PITI Examples

US example — $450,000 home, 10% down, Texas:

• Principal + interest (6.5%, 30 years): $2,560
• Property tax (1.6%): $600
• Insurance: $150
• PMI (1% on $405,000 loan): $338
• Real monthly PITI: $3,648

The advertised "$2,560 mortgage" is 30% below the real cost.

UK example — £400,000 home, 10% deposit, London:

• Principal + interest (5.2%, 25 years): £2,155
• Buildings insurance: £28
• Leasehold service charge (flat): £250
• Council tax band D (paid separately): £200
• Real monthly housing cost: £2,633

How Much House Can You Actually Afford?

Lenders qualify you on PITI, not on principal and interest alone. The 28/36 rule: PITI should not exceed 28% of gross monthly income, and total debt (PITI + student loans + car + credit cards) should not exceed 36%.

On $100,000 gross income: max PITI = $2,333/month. Working backwards at 6.5%, 30 years, 20% down, 1.2% property tax, $150 insurance: that supports a home of about $310,000 — often surprisingly less than buyers assume.

The Bottom Line

Never budget based on the principal+interest figure alone. Always add property tax, insurance, and PMI (if applicable) before deciding how much house you can afford. For most US buyers, the real PITI is 25–40% higher than the advertised mortgage payment. Getting this right protects you from a house that technically "fits" but leaves no room for anything else in your budget.