Ask a lender what your monthly payment is going to be and they'll give you a number that is technically correct and functionally misleading. The number they give you is PITI — Principal, Interest, Taxes, Insurance — and it's calculated using today's tax bill, today's insurance quote, and no HOA at all. It is not the number that will hit your bank account for the next thirty years.
The honest housing payment is PITI + HOA + flood insurance where required + a maintenance reserve + the tax and insurance drift that no one flags on day one. Call it PITI+. Here is what each line looks like at 2026 numbers, so your rent-vs-buy math doesn't quietly under-count the buying side.
The PI part is the honest part
Principal and interest is the only line on the PITI stack that behaves like the lender says it will. On a 30-year fixed loan at 6.75%, a $400,000 loan is $2,594/month for 360 months. That number does not change. That is the number your lender is really quoting when they say "your mortgage payment is $2,594."
Everything else moves.
Property tax: the state-level range that decides the answer
Property tax is levied by your county (and sometimes school district and city), as a percentage of your assessed value. The Tax Foundation's 2025 state-by-state analysis of effective property tax rates on owner-occupied homes shows the range is enormous:
| Rate band | Effective property tax rate | Representative states |
|---|---|---|
| Low | 0.30% – 0.55% | Hawaii, Alabama, Colorado, Nevada, Utah, Louisiana |
| Below average | 0.55% – 0.90% | Arizona, Tennessee, California, Idaho, South Carolina |
| Around US average | 0.90% – 1.20% | US average ≈ 1.08%; Florida, North Carolina, Maryland, Washington |
| Above average | 1.20% – 1.75% | Michigan, Iowa, Pennsylvania, Rhode Island, Ohio, Kansas |
| High | 1.75% – 2.50% | Wisconsin, Connecticut, Vermont, Nebraska, Texas |
| Highest | 2.00% – 2.50%+ | New Hampshire, Illinois, New Jersey |
Source: Tax Foundation 2025, effective rate on owner-occupied housing.
Put a $500,000 house in New Jersey and property tax alone is roughly $12,000/year — $1,000/month. Put the same house in Colorado and it's $2,500/year — $208/month. Same house, same square footage, an $800/month swing on the monthly nut.
This is not an edge case. It is the single largest cross-state variable in the whole rent-vs-buy calculation, and any calculator that lets you type in "1%" as a default without asking your state is misleading you by a factor of 5 in either direction.
The drift. Property tax rates are usually stable — the tax bill is not. Your assessed value follows the market up (though most states cap increases at 3%–10% per year). If home prices rise 5% a year for a decade, expect your property tax bill to roughly double over that period. A calculator that freezes property tax at year-one nominal is understating year-ten ownership cost.
Homeowner's insurance: the line that quietly went nuclear
The national average homeowner's insurance premium was around $1,400/year a decade ago. In 2026 it's roughly $2,300/year, and in the four states with the worst combined wildfire, hurricane, and hail exposure (Florida, Louisiana, Texas, Oklahoma), the average is closer to $4,500–$6,000/year. Source: Insurance Information Institute and state insurance department filings.
That's about $190/month on the national average, but $375–$500/month in a coastal Florida county. And it's the line that has drifted the most this decade: national premiums are up roughly 60% from 2020 to 2025 per the III.
The trap most calculators fall into is quoting today's premium and holding it flat. That is not how insurance behaves. Underwriters reprice annually, replacement cost inflates with construction costs, and in disaster-exposed states the insurer of last resort (Citizens in Florida, Louisiana Citizens, California FAIR Plan) is charging 30–60% more than the private market did five years ago.
How to model it honestly: use today's premium, but assume 4%–6% annual growth — well above general inflation, in line with recent-year homeowner insurance CPI. In Florida, Louisiana, or California wildfire zones, model 8%–10% growth or a step-function that assumes one forced insurer switch in the next 5 years.
Flood insurance: not included in your homeowner's policy
This one catches people. Standard homeowner's insurance policies exclude flood damage. Full stop. If you're in a FEMA-designated Special Flood Hazard Area (SFHA — the "100-year floodplain"), your lender will require flood insurance as a condition of the mortgage. If you're outside that zone, it's optional — but roughly 25% of flood claims come from properties FEMA classified as outside the SFHA, so "optional" and "unnecessary" are not the same thing.
Cost varies by FEMA zone and the newer Risk Rating 2.0 methodology. Rough 2026 ranges from the National Flood Insurance Program:
| FEMA zone | Description | Annual premium (typical single-family home) |
|---|---|---|
| X (unshaded) | Outside SFHA, low risk | $500 – $850 (optional) |
| X (shaded) / B | Between 100-yr and 500-yr flood zones | $700 – $1,200 |
| A, AE, AO | 100-year floodplain (SFHA) | $1,200 – $2,800 |
| V, VE | Coastal high-hazard (velocity zone) | $3,000 – $8,000+ |
Source: NFIP Risk Rating 2.0 published averages, 2025 data.
The Risk Rating 2.0 rollout has made pricing much more per-property specific than the old flat-zone system. Real quotes on a specific address diverge from these bands. But if you're shopping in Florida, coastal Carolinas, Houston, or riverine Iowa, this is a $100–$400/month line you have to include or your rent-vs-buy math is fiction.
HOA dues: the hidden monthly
If you're buying a condo, a townhouse, or a house in a planned community, you're paying an HOA. The Foundation for Community Association Research's 2024 U.S. National Survey of Community Association Managers puts the median HOA fee at:
- Condos: $350 – $500/month is typical; luxury urban towers can be $1,500+
- Townhouses: $150 – $300/month typical
- Single-family HOA (planned communities): $50 – $200/month typical
Median across all HOA-governed housing: roughly $300/month in 2026.
HOA dues cover shared amenities and shared exteriors — pool, roof, siding, sometimes water and trash. In principle that's an offset to your maintenance line. In practice, dues rarely cover the whole exterior maintenance stack, and HOAs also levy special assessments — one-time charges for a re-roof, an elevator overhaul, seawall repair, etc. Special assessments can be $5,000–$50,000+ per unit and are effectively non-optional.
Rule of thumb we use in the calculator: every $100/month of HOA is equivalent to about $18,000 of additional purchase price at a 6.75% 30-year mortgage. A $400/month HOA is functionally the same as buying a house $72,000 more expensive with no HOA and doing the maintenance yourself. That is the honest way to compare the two options.
One warning. In some markets — coastal Florida, older Northeast condos — HOA fees have doubled since 2020 as insurance premiums exploded and deferred-maintenance special assessments started catching up. If you're buying into an HOA with a thin reserve fund, budget for the assessment before it lands. The condo association's audited financials are public; read them.
PMI, when it applies
If you put less than 20% down on a conventional loan, add PMI to the monthly. That deserves its own piece — see PMI explained for the credit-score cost tables and cancellation rules — but the important thing here is that PMI is temporary. Property tax, insurance, and HOA are not. When you're comparing PITI+ to rent, PMI should show up as a limited-duration line that drops off at the 78% LTV milestone, not as a permanent housing cost.
What lender pre-approvals do wrong
The lender's pre-approval letter is optimizing for one number: whether you can service the debt. So they add up P + I + T + I, compare it to your gross monthly income, and either approve or deny you based on a debt-to-income ratio. That's a floor on affordability. It's not the number that tells you whether you can actually live your life at that price point.
The lender leaves out (or defaults to zero):
- HOA dues — often not asked about at pre-approval
- Flood insurance — only required if the property is in an SFHA, and the pre-approval is usually issued before the specific property is chosen
- Maintenance reserve — this is not part of PITI at all, but you will spend it (see the 1% maintenance rule piece)
- Tax and insurance drift — the pre-approval is a snapshot at today's numbers
- Utilities that renters currently have paid — if you're renting in a walk-up with heat included and buying a house with 2,400 square feet to heat, that's another $200–$400/month
The honest number to compare against your rent is not the pre-approval PITI. It's PITI + HOA + a maintenance reserve + drift. On a middle-cost $400,000 house with a $150/month HOA in a state with 1% property tax, PITI+ can easily be 20%–30% higher than the number your lender first quoted.
Putting it in the calculator
Every one of these lines is a top-level input in our calculator — property tax rate defaults to your state's median from the Tax Foundation dataset, insurance defaults to the III national average adjusted by state, HOA defaults to zero (you say when it applies), flood insurance is a toggle keyed to FEMA zone, and each one has an inflation-drift knob you can move. There are no hidden assumptions.
The moment you plug real numbers in for your target house, the buying-side monthly is often 30% higher than what the lender's pre-approval sold you. That doesn't mean don't buy. It means compare the right number against your rent, so the break-even year is a number you can defend, not a number you want to believe.
Ready to see what PITI+ actually looks like on your target house? Try the rent-vs-buy calculator → — the PITI stack is broken out line by line, every default is visible, and every one is editable.