PITI Cost Guide
Principal and interest is tied to the loan. Property taxes and homeowners insurance are tied to the home and its location. This is why two homes at similar rates can have very different monthly budgets.
By Ethan Hayes Published
For a $500,000 home using the example rates below, property taxes and homeowners insurance together add roughly $625 per month before HOA dues, maintenance, or mortgage insurance. Replace the example rates with local estimates before using the result.
The table uses illustrative rates of 1.2% for property taxes and 0.3% for homeowners insurance, with a slightly different assumption for the $800,000 example. Actual rates vary by location and property.
| Home price | Tax rate | Monthly taxes | Insurance rate | Monthly insurance | Combined monthly cost |
|---|---|---|---|---|---|
| $300,000.00 | 1.2% | $300.00 | 0.3% | $75.00 | $375.00 |
| $500,000.00 | 1.2% | $500.00 | 0.3% | $125.00 | $625.00 |
| $800,000.00 | 1.25% | $833.33 | 0.29% | $193.33 | $1,026.67 |
Start with the county tax record or a lender’s tax estimate, then check whether the purchase price could trigger a reassessment. For insurance, request a quote using the actual address, construction type, deductible, and coverage limits.
Treat a percentage rule as a screening tool, not a final number. A high-risk location or an older home can produce an insurance premium far above a simple percentage estimate.
Add monthly taxes and insurance to principal and interest before deciding whether a payment fits. Then separately budget maintenance, HOA dues, utilities, and cash reserves. These costs do not become optional because they are outside the lender’s headline quote.
Annual property taxes are commonly divided by 12 in a monthly budget or escrow estimate. The amount depends on the property assessment and local tax rate, so two homes with the same loan can have different PITI payments.
Use a current quote for the property and coverage you need. A percentage-of-home-value estimate is only a starting point because location, construction, deductible, claims history, and replacement cost affect the premium.
Yes. They are recurring ownership costs that can materially change the all-in payment even when principal and interest looks manageable. Include them before deciding what price fits your budget.
Worked examples are calculated from the assumptions shown on this page, and results are rounded only for display. Use the linked calculator to test a complete scenario with your own property and financing estimates.
These estimates are for educational purposes and are not lending, tax, legal, or financial advice. Actual mortgage terms, property costs, investment returns, and home values can differ materially.
This example is a starting point. Change the inputs in the calculator before making a housing decision.
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