How to Estimate Taxes on a Mortgage

Estimate your property taxes to find out whether you can afford a mortgage.
i Jupiterimages/liquidlibrary/Getty Images

Buying a new home is exciting, but finding one that you can afford and setting up a housing budget is another story. Not only do you have to include your monthly mortgage payment in your housing budget, but you also have to include homeowners insurance premiums and property taxes. Because property tax rates and home values change from year to year, estimating the home’s property taxes is the only way to determine whether you can afford a house.

Step 1

Call your tax assessor to find out the current property tax rate for the area. As of 2011, the average tax rate in the United States was approximately 1.3 percent.

Step 2

Ask the assessor for the home’s latest assessed value.

Step 3

Multiply the home’s assessed value by the current property tax rate to find the estimated property taxes. For example, if the home’s value is $150,000 and the property tax rate is 1.3 percent, the estimated annual property taxes for the home is $1,950 or $150,000 times 0.013.

the nest

×