PITI stands for Principal, Interest, Taxes, and Insurance — the four components of a typical monthly mortgage payment. Some lenders also fold in HOA dues and PMI or MIP, in which case you'll see the payment labeled PITIA instead.
When a lender, listing site, or calculator quotes a monthly payment, always ask whether the number is just principal and interest (P&I) or the full PITI. The gap between the two can be substantial, especially in high-tax areas or homes with a large insurance bill.
How it works
Each piece of PITI is calculated separately and then added together. Principal and interest come from your loan amount and term. Taxes come from the local assessor's annual bill, divided by twelve. Insurance comes from your homeowners policy premium, also divided by twelve.
For example, imagine a monthly principal-and-interest payment of $1,800, property taxes of $300 a month, and homeowners insurance of $100 a month. The full PITI payment is $2,200 — noticeably more than the $1,800 a quick online calculator might show if it only estimates principal and interest.
If you escrow your taxes and insurance, all four pieces are collected together in one payment and the lender pays the tax and insurance bills on your behalf when they come due. If you don't escrow, you're still responsible for all four costs — you just pay taxes and insurance separately, on your own schedule.
When it matters to you
PITI matters most when you're comparing homes, not just loan offers. Two homes with the same price can have very different PITI payments if their property tax rates or insurance costs differ.
It matters for budgeting too: DTI calculations always use full PITI, plus HOA and mortgage insurance where applicable, so the number a lender qualifies you on is the full picture — not just principal and interest.
Common mistakes
- Comparing a rough online payment estimate (P&I only) to a lender's real quote (full PITI) and being surprised by the difference.
- Forgetting that property taxes and insurance can rise every year, which raises the PITI payment even on a fixed-rate loan.
- Not checking HOA dues before making an offer — they aren't part of PITI itself but stack on top of it in your real monthly housing cost.
- Using a home's list price alone to estimate affordability without pulling the actual property tax and insurance figures for that specific address.
FAQs
What's the difference between P&I and PITI?
P&I is just principal and interest. PITI adds property taxes and homeowners insurance on top, giving you the full picture of what actually leaves your account each month.
Does PITI include HOA dues?
Not by definition — PITI covers principal, interest, taxes, and insurance only. When HOA dues are included, the figure is usually labeled PITIA to make that clear.
Why would my PITI payment change if my rate is fixed?
The principal-and-interest portion stays fixed, but the taxes and insurance portions can rise or fall each year based on your local tax assessment and insurance renewal, changing your total PITI payment.