What Is PITI? The Four Parts of Your Mortgage Payment
Your mortgage payment is more than principal and interest. PITI adds taxes and insurance — and lenders use it to decide what you can afford.
The four components
PITI stands for Principal, Interest, Taxes and Insurance — the four parts of a typical monthly mortgage payment. Principal and interest repay the loan itself; property taxes and homeowners insurance are usually collected by the lender into an escrow account and paid on your behalf.
Many payments also include a fifth cost: private mortgage insurance (PMI) if your down payment was under 20%, and sometimes HOA dues. Our mortgage payment calculator breaks all of these out.
Why lenders care about PITI
Lenders qualify you on the full PITI payment, not just principal and interest, because taxes and insurance are unavoidable costs of owning the home. That's why two buyers with the same loan amount can qualify for different homes: higher local property taxes mean a higher PITI and a smaller affordable loan.
PITI feeds directly into your debt-to-income ratio. Under the common 28/36 guideline, your PITI should stay at or below 28% of your gross monthly income.
Escrow and how it changes
When taxes and insurance are escrowed, the lender estimates the annual cost, divides by 12, and adds it to your payment. If your property taxes rise or your insurance premium increases, your monthly payment rises too — even on a fixed-rate loan. Lenders run an annual escrow analysis and adjust the payment accordingly.
Run your numbers
Try the Mortgage Payment Calculator to see how this applies to your own situation.
Open the Mortgage Payment Calculator →Frequently asked questions
What does PITI stand for?
Can my fixed-rate mortgage payment change?
Informational only — not financial or tax advice. This article is general educational information and may not reflect current figures or your individual situation. Tax and financial rules change; verify with the IRS or a qualified professional before acting.