Financial Basics
What is PITI? The 4 Components of Your Mortgage
When you budget for a home, you need to look beyond the loan itself. PITI represents the full scope of your monthly obligation.
Principal
The part of your payment that goes toward paying down the actual loan balance.
Interest
The cost of borrowing the money from the lender.
Taxes
Property taxes collected by your local government.
Insurance
Homeowners insurance and potentially PMI.
Why PITI Matters
Lenders use PITI to calculate your debt-to-income (DTI) ratio. Most lenders prefer your PITI to be less than 28% of your gross monthly income.
Our calculator automatically includes Taxes and Insurance in its calculations to give you an accurate PITI estimate.