What Is PITI?
The four components of a typical mortgage payment: Principal, Interest, Taxes, Insurance.
Definition
PITI is the all-in monthly cost of owning a home with a mortgage. It is the number lenders use to qualify you (against your DTI) and the number you should budget against, not just principal and interest. P (principal) reduces your loan balance. I (interest) goes to the lender. T (property taxes) are collected via escrow and paid to your local government. I (homeowners insurance) is also escrowed. Add HOA fees and PMI for the true monthly cost on a conventional sub-20%-down loan.
Example
On a $300,000 loan at 6.5%: P+I = $1,896, taxes $400, insurance $100, PMI $150. PITI = $2,546/month.
Use It
Try the Mortgage CalculatorRelated Terms
AmortizationThe schedule by which a loan is paid off in equal payments, with shifting principal/interest split.EscrowAn account held by the lender to pay your property taxes and insurance from monthly mortgage payments.PMI (Private Mortgage Insurance)Insurance lenders require on conventional loans when your down payment is below 20%.