How to Calculate a Mortgage Plus PITI
Conventional home mortgages allow you to borrow money in order to finance the purchase of a house. But in most cases, your mortgage payment does not just include the repayment of a loan and its interest. It also includes a monthly payment of property taxes and property insurance premiums; thus the acronym PITI (principal, interest, taxes, and insurance). The mortgage company rolls these extra payments into an escrow account and pays the tax authority and insurance company at the appropriate time.
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Things You'll Need
- Mortgage information: term, interest rate, and principal amount
- Property tax information: current year tax assessment
- Property insurance information: current annual premium
- Online calculator
Instructions
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Calculating PITI Using Online Calculator
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1
Go to an online calculator. Enter the total sales price of the home.
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2
Subtract your total down payment.
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3
Enter the interest rate on your loan. If you have an adjustable rate loan, enter the current rate. You will have to recalculate PITI payments any time the loan interest rate adjusts in the future.
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4
Enter the current annual tax assessment on the property. This should have been provided to you by the mortgage company, along with the property insurance premium. If you do not know what it is, the calculator will use an assumed figure drawn from the property value and the location.
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5
Enter the annual property insurance premium on the property. If you do not know what it is, the calculator will use an assumed figure based on the assessed property value, usually about .0035 percent of the value.
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Click on the "Calculate" "Compute" or "Submit" button. Some online calculators will also give your current loan-to-value (LTV) ratio, which will reveal the amount of equity (either positive or negative) you currently have in the property.
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Tips & Warnings
You may also be able to include mortgage insurance premiums.
Rental property calculators include mortgage amount, utilities, taxes, depreciation, yearly repairs, and rental income.
You can find online calculators at http://www.fhahomeloanmortgage.com/calculators/mortgage_loan_calculator.shtml (for FHA loans); at http://www.realestateabc.com/calculators/PITI.htm, at http://www.mortgage-info.com/mortgage-calculators/mortgagepaymentcalculator.aspx, and many other sites readily found by entering "PITI calculator" into a good search engine.
The amounts provided by online PITI calculators are only estimates. Contact your mortgage company for a more accurate, and legally binding, calculation of PITI payments on your home.
