Mortgage Calculator Texas

Authored and Reviewed by: David Chen, CFA

This calculator is based on standard financial amortization principles and reviewed for accuracy.

Calculate your potential monthly mortgage payments in Texas, including principal, interest, property taxes, and home insurance. This tool provides a clear breakdown of your estimated housing costs.

Mortgage Calculator Texas

Estimated Monthly Payment (PITI)

$0.00

Principal & Interest:

Detailed Monthly Payment Breakdown

Mortgage Calculator Texas Formula

The core P&I (Principal and Interest) payment ($M$) is calculated using the following amortization formula:

$$M = P \left[ \frac{i(1+i)^n}{(1+i)^n – 1} \right]$$

Where:

• $P$ = Loan Amount (Principal)
• $i$ = Monthly Interest Rate (Annual Rate / 1200)
• $n$ = Total Number of Payments (Loan Term in Years $\times$ 12)

The total monthly payment (PITI) is then calculated by adding monthly taxes and insurance:

$$PITI = M + \left( \frac{\text{Annual Tax}}{12} \right) + \left( \frac{\text{Annual Insurance}}{12} \right)$$

Formula Sources: Investopedia Amortization Formula, CFPB Mortgage Payment Breakdown

Variables Explained

Understanding the inputs is crucial for accurate results:

• Loan Amount: The principal amount you are borrowing from the lender. This is your home price minus any down payment.
• Annual Interest Rate (%): The rate your lender charges for the loan, expressed as a percentage. Note that this is the annual rate.
• Loan Term (Years): The duration over which you will repay the loan, typically 15 or 30 years.
• Annual Property Tax ($): In Texas, property taxes can be high and vary significantly by county and city. This is the estimated annual tax bill you must pay.
• Annual Home Insurance ($): The annual cost of protecting your home against damage, required by most lenders.

Related Calculators

• Texas Refinance Calculator
• Amortization Schedule Estimator
• Bi-Weekly Mortgage Payment Calculator
• Texas Property Tax Rate Tool

What is a Mortgage Calculator for Texas?

A Texas mortgage calculator is a crucial tool for prospective homeowners in the Lone Star State. Due to Texas having no state income tax, local property taxes are often higher than in many other states to compensate. This makes calculating the total monthly PITI (Principal, Interest, Tax, Insurance) payment, not just the P&I portion, particularly important for budgeting.

This calculator allows users to estimate their monthly housing expenses, providing a realistic view of affordability. By adjusting the loan amount, interest rate, and term, users can model different financial scenarios and understand the impact of property taxes specific to the region they are looking at.

How to Calculate a Mortgage Payment (Example)

1. Gather Inputs: Assume a $300,000 Loan, 6.00% Annual Rate, 30-Year Term, $6,000 Annual Tax, $1,500 Annual Insurance.
2. Calculate Monthly Rate ($i$): $6.00\% / 1200 = 0.005$.
3. Calculate Total Payments ($n$): $30 \text{ years} \times 12 = 360 \text{ months}$.
4. Calculate P&I Payment ($M$): Plug the values into the amortization formula. $M = \$300,000 \times [0.005(1+0.005)^{360} / ((1+0.005)^{360} – 1)] \approx \$1,798.65$.
5. Calculate Monthly Tax and Insurance: Monthly Tax = $\$6,000 / 12 = \$500.00$. Monthly Insurance = $\$1,500 / 12 = \$125.00$.
6. Determine Total Monthly PITI: $\$1,798.65 + \$500.00 + \$125.00 = \$2,423.65$.

Frequently Asked Questions (FAQ)

Why are Texas property taxes so high?

Texas does not have a state income tax. To fund local services like schools and infrastructure, local jurisdictions (counties, cities, and school districts) rely heavily on property taxes, leading to generally higher rates compared to states with income tax.

Is the annual percentage rate (APR) used in this calculator?

No, this calculator primarily uses the nominal Annual Interest Rate to determine the monthly payment. APR includes fees and closing costs, which would require a separate, more complex calculation.

Should I include Private Mortgage Insurance (PMI) in my calculation?

If your down payment is less than 20% of the home price, you will likely need to pay PMI. This is a monthly cost that must be added to the PITI calculation for a full estimate. Since PMI varies greatly, it is not included by default but should be factored into your total budget.

What happens if I enter zero for Property Tax or Insurance?

The calculator will still work, but the result will only reflect the Principal and Interest (P&I) payment. Lenders in Texas will require you to pay tax and insurance, so it is highly recommended to use reasonable estimates for an accurate budget.