Definition
PITI (Principal, Interest, Taxes, Insurance) is your total monthly housing payment. Principal and interest go to the lender; taxes and homeowners insurance are usually held in escrow and paid on your behalf. It's what you should calculate for affordability.
Not sure where this fits?
Answer a few questions and we’ll open the path that fits, at the right step.
Find my pathAbout this term
Principal is the portion of payment reducing the loan balance, while interest is the lender's cost. Property taxes and homeowners insurance are typically held in an escrow account by the lender and paid on the borrower's behalf. When mortgage insurance is required, it's often included in the PITI payment.
Pro Tip
When calculating affordability, ensure your PITI payment is no more than 28% of your gross monthly income for optimal financial health.
Example
A $300,000 mortgage at 6% for 30 years has a principal and interest payment of $1,799, plus $400 taxes and $100 insurance monthly, totaling $2,299 PITI.