What Is PITI (Principal, Interest, Taxes, Insurance)?
PITI stands for Principal, Interest, Taxes, and Insurance — the four main components of your total monthly mortgage payment. Together, they represent your actual housing cost. Some payments also include PMI and HOA, making the full cost even higher.
Key Facts
- P = Principal (paying down the loan). I = Interest (cost of borrowing). T = Taxes (property taxes). I = Insurance (homeowners insurance).
- Your PITI is what lenders use to calculate your front-end DTI ratio.
- Taxes and insurance are collected monthly via escrow and paid annually by your lender.
- Don't forget PMI and HOA — they're not in the acronym but they're part of your real cost.
Real-World Example
Monthly payment breakdown on a $585,000 loan at 6.75%: Principal & Interest: $3,794. Property Taxes: $620. Homeowners Insurance: $180. Total PITI: $4,594. Add PMI ($225) and HOA ($0) = true monthly cost: $4,819.
Why It Matters
Many buyers focus only on principal and interest. But taxes and insurance add hundreds per month. Always look at your full PITI (plus PMI and HOA if applicable) to know your true monthly housing cost.
En Español
PITI significa Principal, Interés, Impuestos y Seguro — los cuatro componentes principales de tu pago mensual total de hipoteca. Juntos, representan tu costo real de vivienda. Algunos pagos también incluyen PMI y HOA, haciendo el costo total aún mayor.