Mortgage Calculator with Property Taxes
Property taxes are a significant — and often overlooked — part of your monthly housing cost. This calculator includes taxes in your payment estimate so you can budget accurately. Pre-filled with the US national average of $5,000/year.
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Required when down payment < 20%
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How property taxes are added to your mortgage payment
Most lenders collect property taxes monthly through an escrow account. Each payment includes one-twelfth of the estimated annual tax bill, and the lender pays the county when the bill comes due. With the default $5,000/year, that adds about $417 to every monthly payment.
Your total payment is usually called PITI: Principal, Interest, Taxes and Insurance. On a $400,000 home with 20% down at 6.9%, principal and interest come to about $2,108/month. Property tax at $5,000/year raises that to about $2,525 before insurance. That is almost 20% more than the loan payment alone.
How to estimate property tax on a home you're buying
Multiply the purchase price by the local effective tax rate. Effective rates in the US range from about 0.3% (Hawaii, Alabama) to over 2% (New Jersey, Illinois). The national median is about 0.9%–1.0%.
Don't rely on the seller's current tax bill. In many states, assessments reset to the sale price when a home changes hands. In others, the seller may have exemptions that end at the sale, such as senior, veteran or long-term homestead exemptions. Ask the county assessor or your lender for an estimate based on your purchase price.
Owner-occupants can often cut the bill by filing a homestead exemption after closing. It is a one-time application in most states, and missing it can cost hundreds of dollars a year.
Why your payment can change even with a fixed-rate loan
A fixed rate locks your principal and interest, not your taxes. Lenders review escrow every year. If taxes rise after a reassessment or a new levy, your monthly payment goes up, and you may be billed for any shortage. Budget for property taxes rising over time, especially in fast-appreciating areas.
Frequently Asked Questions
Are property taxes included in my mortgage payment?
Usually yes. Most lenders require an escrow account and collect one-twelfth of your annual property tax with each payment. They can be paid separately only if your lender waives escrow, which typically requires 20% or more down.
How much are property taxes on a $400,000 house?
At the US median effective rate of about 1%, roughly $4,000 a year, or $333 a month. It can be as low as $1,200 a year in Hawaii or Alabama and over $8,000 a year in New Jersey or Illinois.
Can I deduct property taxes?
If you itemize, state and local taxes (SALT), including property tax, are deductible up to the federal SALT cap. Most households take the standard deduction instead, so check whether itemizing actually saves you money.