How Property Taxes Affect Your Monthly Mortgage Payment
By Smart Mortgage Calculator Editorial Team · Published June 10, 2026 · 6 min read
When buyers search for a "mortgage calculator with taxes and insurance," they're usually trying to avoid the surprise that sinks budgets: a payment that's hundreds higher than principal and interest alone. Property taxes are often the biggest piece of that gap.
How property taxes are calculated
Most counties tax a percentage of your home's assessed value each year. If your home is assessed at $350,000 and the effective rate is 1.2%, you owe $4,200 per year — or $350 per month when escrowed into your mortgage payment.
States where taxes hit hardest
Effective rates vary from under 0.3% in Hawaii to above 2% in parts of New Jersey, Illinois, and Texas. A $300,000 home might cost $75/month in taxes in one state and $500/month in another — same loan, very different budget.
- Texas, Illinois, and New Jersey: among the highest effective rates nationally.
- Hawaii, Alabama, and Colorado: among the lowest.
- California: moderate rate on very high home values — taxes still add up.
- Florida: mid-range rates, but insurance often matters more.
Taxes and affordability
Lenders include estimated taxes in your debt-to-income calculation, but online calculators that ignore taxes make homes look cheaper than they are. Always use a calculator that includes property tax, insurance, PMI, and HOA — like our mortgage calculator — or pick your state page for localized defaults.
Find your state estimate
We publish localized defaults for all 50 states. Start with high-tax markets like Texas, New Jersey, or Illinois, or browse the full list from the main calculator page.
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This article is for general educational purposes only and is not financial advice. Rates and figures are indicative and may change. Consult a licensed mortgage professional about your situation. See our disclaimer.