What Is PITI?
PITI stands for Principal, Interest, Taxes, and Insurance — the four components that typically make up a full monthly mortgage payment.
Advanced Explanation
PITI - principal, interest, property taxes and homeowners insurance - is the core monthly housing payment used in qualifying ratios. Lenders also add mortgage insurance and HOA dues when calculating the housing expense for debt-to-income purposes.
Formula
PITI = Principal + Interest + Property Taxes + Homeowners Insurance
Example
A $2,000 monthly mortgage payment might break down as $1,400 principal & interest, $400 property taxes, and $200 homeowners insurance.
Why It Matters
Lenders qualify borrowers using the full PITI payment, not just principal and interest — so taxes and insurance can meaningfully affect how much home you can afford.