Arizona Mortgage Calculator (with Arizona Property Taxes & Insurance)

Arizona property taxes work differently than the market-value assessments used in most states. County assessors calculate a "Limited Property Value" (LPV) for owner-occupied homes, which is capped so it can only rise a set percentage each year regardless of how fast the home's actual market value climbs. That LPV, not the sale price, is what the county's tax rate is applied to. It is one of the main reasons Arizona's effective property tax burden has consistently ranked among the lowest in the country even as home prices in Maricopa and Pima counties rose sharply over the past decade. This calculator models that reality with a 0.62% effective annual rate applied to the home's purchase price as a planning baseline, since a buyer's actual first-year LPV is set by the county assessor and typically will not equal the purchase price.

Arizona is also one of a small number of states that charges no real estate transfer tax, which meaningfully changes closing cost math compared to states like California or Colorado that levy a transfer tax on every deed recorded. That absence does not appear directly in a monthly payment calculation, but it matters when a buyer compares total cash needed at closing across states, since Arizona's closing costs skew toward title insurance, recording fees, and lender charges rather than a transfer tax line item.

This tool combines principal and interest on a standard 30-year fixed amortization with a modeled property tax and a flat homeowners insurance estimate to produce a single PITI (Principal, Interest, Taxes, Insurance) figure a buyer can use for a quick affordability check before consulting a lender for a formal pre-approval.

1. Down payment and loan principal. Loan Principal = Home Price x (1 - Down Payment %).
2. Principal and interest. The loan principal amortizes over 360 months using the standard fixed-rate mortgage formula:

$$PMT = \frac{P \times i}{1 - (1+i)^{-360}}$$

where P is the loan principal and i is the monthly rate (APR / 12).

1. Property tax estimate. Monthly Property Tax = Home Price x 0.62% / 12. This applies the modeled effective rate to the purchase price rather than the county's LPV, since LPV is only known after county assessment.
2. Insurance estimate. A flat $125/month is added as a homeowners insurance placeholder.
3. PITI total. Monthly PITI = Principal & Interest + Property Tax + Insurance.

Using the calculator's baseline inputs, which match its published test vector:

• Home Purchase Price: $380,000
• Down Payment: 20% ($76,000)
• Interest Rate (APR): 6.5%

Step by step: - Loan principal: $380,000 x 80% = $304,000.00 - Monthly rate: 6.5% / 12 = 0.541667% - Monthly principal & interest: $1,921.49 - Monthly property tax: $380,000 x 0.62% / 12 = $196.33 - Monthly insurance estimate: $125.00 - Total monthly payment (PITI): $1,921.49 + $196.33 + $125.00 = $2,242.82 - Total interest paid over 30 years: $387,735.24

Raising the down payment to 5% instead of 20% (a scenario this calculator supports directly) increases the loan principal to $361,000 and pushes the monthly principal-and-interest payment above $2,280, which is a useful comparison for buyers weighing a low-down-payment loan program against a conventional 20% down purchase.

• County-specific assessment differences. Maricopa, Pima, Pinal, and Yavapai counties each set their own combined primary and secondary tax rates, and school district and special district levies vary block by block; the 0.62% figure is a statewide planning estimate, not a specific county's actual rate.
• The Limited Property Value cap. A home's LPV is often lower than its purchase price in the first year and grows on a capped schedule, meaning actual year-one and future property tax bills can differ meaningfully from a flat percentage of purchase price.
• Private mortgage insurance (PMI). Below 20% down, most conventional loans require PMI; this calculator does not add a separate PMI line item even when down payment percent is reduced in the scenario toggles.
• HOA dues. Common in Arizona master-planned communities in the Phoenix and Tucson metro areas, HOA fees are not part of the PITI figure here.
• Closing costs and prepaid escrow reserves, which affect cash needed at closing but not the ongoing monthly payment modeled here.

• Assuming the 0.62% rate applies uniformly statewide when actual combined rates vary by county, city, and school district, sometimes by more than double.
• Confusing Limited Property Value with market value, leading buyers to expect a tax bill based on their purchase price when the county assessor's LPV may differ substantially, especially in a fast-appreciating neighborhood.
• Forgetting PMI when running a low-down-payment scenario, which understates the true monthly obligation below 20% down.
• Overlooking flood or wildfire-specific insurance riders in parts of Arizona where the flat $125/month estimate will not reflect actual premiums.
• Not re-shopping insurance annually, since Arizona homeowners insurance premiums have risen faster than the national average in several counties due to wildfire risk exposure.

• Arizona Department of Revenue: Property Tax Division, Limited Property Value guidance
• Arizona county assessor offices (Maricopa County Assessor, Pima County Assessor): parcel-level rate and LPV lookups
• Consumer Financial Protection Bureau (CFPB): mortgage disclosure and PMI requirements under Regulation Z
• Arizona Department of Insurance and Financial Institutions: homeowners insurance market data