1. What is a Mortgage and Escrow Payment Calculator?

Definition: This calculator determines your total monthly mortgage payment including principal, interest, taxes, and insurance (PITI).

Purpose: It helps homeowners and buyers understand their complete monthly housing costs by incorporating escrow payments into the mortgage payment.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( M_{total} \) — Total monthly payment (USD)
• \( M \) — Principal and Interest payment (USD)
• \( T \) — Annual property tax (USD)
• \( I \) — Annual homeowners insurance (USD)

Explanation: The annual tax and insurance costs are divided by 12 to get monthly escrow amounts, which are added to the principal and interest payment.

3. Importance of Escrow Calculation

Details: Most lenders require escrow accounts to ensure property taxes and insurance are paid on time. This calculation gives you the true cost of homeownership.

4. Using the Calculator

Tips: Enter your principal and interest payment, annual property tax, and annual insurance premium. All values must be ≥ 0.

5. Frequently Asked Questions (FAQ)

Q1: What exactly is included in escrow?
A: Escrow typically includes property taxes and homeowners insurance, but may also include flood insurance or HOA fees if applicable.

Q2: How do I find my annual property tax amount?
A: Check your property tax statement or contact your local tax assessor's office. For new purchases, your realtor can provide estimates.

Q3: Does homeowners insurance include mortgage insurance?
A: No, mortgage insurance (PMI) is separate and would be included in the principal and interest payment if applicable.

Q4: Can escrow payments change over time?
A: Yes, as tax rates and insurance premiums change, your lender will adjust your escrow payments annually.

Q5: What if I don't have an escrow account?
A: You would still need to pay these costs separately, so this calculator helps budget for the total housing expense.