PITI
PITI is shorthand for the four components of a complete monthly mortgage payment: Principal, Interest, Taxes, and Insurance.
- Principal — the part that pays down your loan balance and builds home equity.
- Interest — the lender's charge for the borrowed money.
- Taxes — property taxes, usually collected monthly into an escrow account.
- Insurance — homeowners insurance, plus PMI if your down payment was under 20%.
PITI matters because it is the number lenders actually test against your income. The classic planning guideline says PITI should stay under about 28% of gross monthly income, and PITI plus other debts under about 36% — the "28/36 rule" used in debt-to-income checks. HOA dues, where they apply, are counted on top.
Ads and rate quotes usually show only principal and interest, so the real monthly cost is easy to underestimate. Our mortgage payment calculator always shows the full PITI breakdown, and the affordability pages apply the 28/36 ratios to your income.
Related terms: Escrow, Property Tax, Debt-to-Income Ratio (DTI).
