California Mortgage Calculator

How California Mortgage Calculator Works

M = P × [r(1+r)^n] / [(1+r)^n - 1]

Prop 13

Proposition 13 — California's landmark property tax law limits the tax rate to 1% of assessed value plus local bonds, and caps annual assessment increases at 2%. This keeps property taxes low for long-term homeowners.

CalHFA

California Housing Finance Agency — Offers down payment assistance and competitive mortgages for first-time homebuyers. Programs include CalHFA FHA, CalPLUS, and the MyHome assistance program with up to 3.5% of purchase price.

Mello-Roos

Mello-Roos Tax — Additional property tax assessment in some California communities to fund local infrastructure. Can add 0.5-2% to the effective tax rate. Not covered by Prop 13 protections.

PMI

Private Mortgage Insurance — Required when down payment is less than 20% of the home value. Protects the lender (not you) if you default. PMI typically costs 0.5-1.5% of the loan amount annually and can be cancelled once equity reaches 20%.

Source: Standard mortgage amortization formula per CFPB mortgage disclosure requirements. Prop 13 tax rates based on California State Board of Equalization published data.

How to Use

1. Enter the California home price — use $750,000 as a starting point.
2. Enter your down payment. CalHFA offers up to 3.5% assistance for qualifying first-time buyers.
3. Select your loan term. 30-year fixed is standard in California.
4. Enter the property tax rate. The default 0.77% reflects Prop 13 limits — check if your area has Mello-Roos.
5. Review the results — California has both property tax and state income tax (up to 13.3%), unlike Texas or Florida.

Quick Reference

Common Uses

• •Estimate monthly mortgage payments on a California home including Proposition 13 property taxes and Mello-Roos special assessments.
• •Compare how California high home prices and progressive state income tax affect your overall housing affordability.
• •Plan your home buying budget by modeling the impact of CalHFA down payment assistance programs and different loan terms.

Understanding the Result

Worked Examples

Frequently Asked Questions

How does Proposition 13 affect new homebuyers?

Prop 13 limits property tax to 1% of the purchase price (plus local bonds) and caps increases at 2%/year. For a new buyer, your tax is based on your purchase price — so you pay ~1% of what you paid. This is much lower than Texas (~1.8%) but on a much higher home price.

What is Mello-Roos?

A Mello-Roos is an additional property tax assessment in some California communities to fund new schools, roads, utilities, or public facilities. It is NOT covered by Prop 13 protections and can add 0.5-2% to your annual tax rate. Always check if a home is in a Mello-Roos district before making an offer.

What down payment help is available in California?

CalHFA (California Housing Finance Agency) offers several programs: The MyHome Assistance Program provides up to 3.5% of the purchase price for down payment or closing costs. CalPLUS combines a lower-rate mortgage with a zero-interest deferred-payment loan. Income limits apply based on county.

How does California's state income tax affect home affordability?

California has one of the highest state income tax rates in the US (1-13.3% brackets). When calculating how much home you can afford, factor in that your take-home pay is reduced by state income tax — unlike Texas, Florida, or Nevada which have no state income tax.

What are supplemental property tax bills in California?

When you buy a home, the county assessor issues a supplemental tax bill for the difference between the previous owner assessed value (under Prop 13) and your new purchase price. For example, if the previous owner had been in the home for 20 years and was paying taxes on a $300,000 assessment, your supplemental bill covers the difference between that and your $750,000 purchase price for the remainder of the tax year. Budget for this one-time supplemental bill in your first year of homeownership — it can be several thousand dollars.

Pro Tips

• →Run Prop 13 numbers carefully: your tax basis resets to the purchase price, so two identical homes can have dramatically different tax bills depending on when they were last sold.
• →Check for Mello-Roos before making an offer — some communities add 1-2% to the effective tax rate, adding hundreds per month to your payment.
• →CalHFA MyHome down payment assistance is a deferred-payment loan — no monthly payments, due when you sell or refinance. It covers up to 3.5% of the purchase price.
• →If you can put down 20%, do it: PMI in California can add $200-500/month because of the high loan amounts, and it protects the lender, not you.

Limitations to Know

• •Prop 13 tax calculations assume the purchase price becomes the assessed value — supplemental tax bills may apply in the first year if the property was previously assessed at a much lower value.
• •Mello-Roos assessments vary by community and are not listed on MLS — always check with the county assessor or title company before closing.
• •CalHFA programs have income limits that vary by county (e.g., $159,000 for a 1-2 person household in many CA counties for 2025). Not all buyers qualify.

Sources

• CalHFA Homebuyer Programs
• CFPB — Mortgage Payment Calculator Methodology