Quick Answer
PITI adds up the four pieces of your monthly mortgage payment: principal, interest, property taxes, and insurance. Lenders qualify you based on your full PITI, not just the loan payment, so it directly affects how much home you can afford alongside your debt-to-income ratio.
- Principal
- Portion that reduces your loan balance
- Interest
- The lender's charge for the loan
- Taxes
- Property taxes, often collected through escrow
- Insurance
- Homeowners insurance, plus PMI if required
The Four Parts of PITI
Principal and interest make up your base loan payment, gradually paying down what you borrowed while covering the lender's cost of the money. See amortization for how that balance shifts over the loan term.
Taxes and insurance are usually collected monthly and held in escrow, then paid on your behalf when the county tax bill or insurance premium comes due, so you rarely have to write a separate large check.
Why PITI Matters for Qualifying
When a lender calculates how much you can borrow, they weigh your full PITI against your income, not just principal and interest. A home with higher property taxes or HOA dues can lower the loan amount you qualify for even at the same purchase price.
Comparing homes by PITI, rather than list price alone, gives a more accurate sense of what a property will actually cost you each month.
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Frequently Asked Questions — PITI
Does PITI include HOA dues?
No. HOA dues are a separate cost lenders often factor in when qualifying you, but they aren't part of the PITI acronym itself.
Why are my taxes and insurance included in my mortgage payment?
Many lenders escrow taxes and insurance so they're paid automatically and on time, protecting their collateral and helping you avoid one large annual bill.
Can I pay my own taxes and insurance instead of escrowing?
Sometimes, depending on your loan program and down payment size. Ask your lender whether a waiver is available.
Does PMI count as part of PITI?
PMI is typically folded into the insurance portion of the payment when it applies.