What your result means
The headline number above is the full annual cost of holding the property: mortgage principal and interest, property tax, insurance, HOA dues, utilities you keep running while you are away, a maintenance reserve, and whatever seasonal opening and closing costs apply, minus any rental income you enter. Dividing that by the nights you actually use the place gives a cost-per-night figure that is often the most useful number for deciding whether a vacation home is worth it compared with simply renting one for the weeks you want. It is not a tax bill or a lender's affordability number, just an honest running-cost estimate built from the figures you provide.
Worked example
Take a $650,000 lake house in northern Michigan with a $400,000 mortgage balance at 6.5% over a 30-year amortization. Monthly principal and interest on that loan comes to roughly $2,528, or about $30,339 a year. Add $7,500 in annual property tax, $2,400 in homeowners insurance, no HOA, $250 a month in utilities kept on through the off-season ($3,000 a year), a 1% maintenance reserve on the property's value ($6,500 a year), and $1,500 for closing up the dock and winterizing the pipes each fall. That totals roughly $51,200 a year, or about $4,270 a month. If the family uses the house for 45 nights a year, that works out to a little over $1,100 a night, before any weeks they choose to rent it out. These figures are illustrative only.
How this is calculated
Mortgage principal and interest use standard US monthly-compounding amortization on the balance, rate and years remaining that you enter. The maintenance reserve defaults to 1% of the property's value per year, a widely used rule of thumb for budgeting upkeep on a home that sits empty part of the year; raise it if the property is older, waterfront, or seasonal-climate exposed.
| Line item | How it is estimated |
|---|---|
| Mortgage | Standard US amortization, monthly compounding, on your entered balance, rate and term |
| Property tax | Entered directly; effective rates vary roughly 6 to 7 times between states, from about 0.27% to 0.29% of value in Hawaii up to about 1.9% to 2.2% in New Jersey and Illinois (Tax Foundation, using American Community Survey data that typically lags 1 to 2 years) |
| Insurance, HOA, utilities | Entered directly, annualized where entered monthly |
| Maintenance reserve | Editable percentage of property value, default 1% a year |
The 2026 tax picture matters here even though this calculator does not compute your tax bill. The One Big Beautiful Bill Act, signed in 2025, made the $750,000 mortgage acquisition-debt cap permanent (applied combined across your first and second home, not per property) and made permanent the suspension of the separate home-equity-interest deduction. It also raised the SALT (state and local tax) deduction cap from $10,000 to $40,000 starting in 2025, indexed up slightly for 2026, with a phase-down for taxpayers with income above $500,000. Property tax on a second home counts toward that same combined SALT cap alongside your state income tax and your main home's property tax, so in a high-tax state you may not get the full deduction the sticker cap suggests. Unless Congress acts again, the cap is scheduled to revert to a flat $10,000 with no income phase-down starting in 2030, which matters if you are budgeting several years out.
What this calculator does not cover
It does not calculate your income tax deduction, capital gains on a future sale, private mortgage insurance, closing costs, or state-specific transfer or transient-occupancy taxes if you rent the property short-term. It also does not model the exact 2026 inflation-indexed SALT cap dollar figure, since that precise number was not independently verifiable at the time this page was written; the $40,000 base figure is used as a placeholder pending IRS confirmation. State property tax rates shown in the table above are illustrative ranges, not your county's actual rate. If you have not bought yet, see our guide to buying a vacation home; if you are trying to work out what a future sale would cost, see vacation home tax rules or run the capital gains calculator.
Questions
Is the SALT cap really $40,000 in 2026?
The base cap rose to $40,000 for 2025 under the One Big Beautiful Bill Act and is indexed up slightly for 2026 (commonly cited as around $40,400, though the exact figure has not been independently confirmed against IRS guidance as of this writing). It phases down for income above $500,000 and is scheduled to revert to a flat $10,000 in 2030 absent further legislation.
Does the mortgage interest cap apply per property?
No. The $750,000 acquisition-debt cap applies combined across your primary residence and your second home, not $750,000 per property.
How much should I budget for maintenance?
1% of the property's value per year is a common starting rule of thumb, higher for older, waterfront or harsh-climate properties that need more seasonal work.
Does this include rental platform fees if I list the property?
No. Enter your rental income net of platform fees and cleaning costs if you want the total to reflect what actually reaches you.
Why does property tax vary so much by state?
Effective property tax rates (tax paid divided by home value) vary roughly 6 to 7 times across states, from under 0.3% in Hawaii to over 1.9% in New Jersey and Illinois, per Tax Foundation data.
Last reviewed 15 September 2026 against IRS Publication 936, the text of the One Big Beautiful Bill Act (H.R. 1, 119th Congress), and Tax Foundation property tax data. Next review March 2027.
This calculator gives a general estimate from the figures you enter. It is not financial, tax, legal or mortgage advice. Rules change and personal circumstances matter, so confirm with a qualified professional before you act. See the full disclaimer.