Total Payment Formula:
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Definition: This calculator determines your total monthly mortgage payment including principal, interest, taxes, and insurance (PITI).
Purpose: It helps homebuyers and homeowners understand their complete monthly housing costs by including escrow items in the calculation.
The calculator uses the formula:
Where:
Explanation: The calculator adds your monthly principal/interest payment to the monthly portion of your taxes and insurance.
Details: Most lenders require escrow accounts to ensure property taxes and insurance are paid. This calculation shows your true monthly housing cost.
Tips: Enter your principal/interest payment, annual property tax, and annual insurance premium. All values must be ≥ 0.
Q1: What's included in escrow?
A: Typically property taxes and homeowner's insurance. Some lenders may include flood insurance or HOA fees if required.
Q2: How do I find my annual tax amount?
A: Check your property tax statement or contact your local tax assessor's office.
Q3: Can I remove escrow from my mortgage?
A: Some lenders allow this after establishing good payment history, often with a fee.
Q4: Why divide taxes/insurance by 12?
A: Lenders collect 1/12 of the annual amount each month to ensure funds are available when payments are due.
Q5: What if my taxes or insurance change?
A: Your lender will adjust your escrow payments annually based on actual costs.