Definition
PITI (principal, interest, taxes, insurance)
PITI stands for principal, interest, taxes and insurance, the four components of a typical monthly mortgage payment. Lenders qualify borrowers on PITI, not principal and interest alone, and usually add mortgage insurance and HOA dues where they apply. It is the housing figure used in debt-to-income ratios.
Principal and interest come from the loan amount, rate and term. Taxes are the annual property tax divided by twelve. Insurance is the annual homeowners premium divided by twelve. When the loan has an escrow account, the servicer collects all four in one monthly payment and pays the tax and insurance bills when due.
Worked example. A $320,000 loan at an illustrative 6.5% over 30 years has principal and interest of about $2,023. Annual property tax of $4,800 adds $400 a month, and a $1,500 insurance premium adds $125. PITI is about $2,548. If the loan carries $150 of monthly PMI and the condo has $200 of HOA dues, the housing payment used for qualifying is about $2,898.
The gap between principal-and-interest and PITI is the most common reason online payment estimates disappoint borrowers. In high-tax counties, or where insurance premiums have climbed, taxes and insurance can add a large share on top of P&I. PITI also changes over time even on a fixed-rate loan, because tax assessments and premiums move and escrow payments are adjusted each year. The home loan calculator breaks the payment into each piece.
Calculators that use this term
FAQ · 2 questions
Questions about PITI (principal, interest, taxes, insurance)
Is PITI the same as my monthly mortgage payment?
Usually it is close. If your taxes and insurance are escrowed, your payment is PITI plus any mortgage insurance. HOA dues are normally paid separately to the association but still count for qualifying.
Why did my PITI payment go up on a fixed-rate loan?
The principal and interest part stays fixed, but property taxes and insurance premiums can rise. When they do, the servicer raises the escrow portion after its annual review.
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