Loan basics
PITI
Abbreviation: PITI
Definition
PITI stands for principal, interest, taxes and insurance — the four components of a typical monthly mortgage payment. Lenders use PITI (plus any mortgage insurance and HOA dues) as the housing expense in debt-to-income ratios, so it is the figure that determines how much a borrower can qualify for.
PITI, explained
Property taxes and homeowners insurance are usually collected monthly into an escrow account and paid by the servicer when due.
A mortgage calculator that shows only P&I understates the real payment, often by several hundred dollars a month.
See PITI in a calculator
The Mortgage Calculator shows how this works with real numbers. Monthly payment, interest breakdown, and amortisation for a fixed-rate mortgage.
Open the Mortgage CalculatorRelated terms
- Principal and interest (P&I)Principal and interest (P&I) is the part of a mortgage payment that repays the loan balance (principal) and pays the lender’s charge for borrowing (interest).
- Escrow accountAn escrow account is a holding account managed by the mortgage servicer that collects part of each monthly payment to pay property taxes and homeowners insurance when they fall due.
- Debt-to-income ratio (DTI)Debt-to-income ratio (DTI) compares monthly debt payments with gross monthly income.
Q.01What is PITI (PITI)?
Q.02Does PITI include PMI?
Q.03Why do lenders care about PITI?
Explain it with their numbers
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