P
Principal
The portion of the loan balance you are paying back. Principal reduces what you owe and builds equity.
BUYER MONEY GUIDE
PITI: the four basic pieces behind a mortgage payment.
PITI stands for Principal, Interest, Taxes and Insurance. It is a much better starting point for affordability than looking only at principal and interest—because the amount leaving your bank account each month can be materially higher.
I
Interest
The lender's charge for lending the money. On a typical fixed-rate mortgage, the combined principal-and-interest payment is generally fixed, even though the split changes over time.
T
Taxes
Property taxes owed to local taxing authorities. They may be collected monthly through escrow, but the tax bill itself is a property cost—not a lender fee.
I
Insurance
Homeowners insurance protecting the property and your interests. It is often escrowed with taxes, but not every loan handles it the same way.
PITI is not always the whole monthly housing cost.
Mortgage insurance may be added
If your financing requires PMI or another form of mortgage insurance, that can sit on top of the four PITI components. Conventional PMI is different from homeowners insurance.
Understand PMI →HOA or condo dues are usually separate
Association dues can materially change affordability even though they are not one of the four PITI letters and are commonly paid separately from the mortgage servicer.
Escrow can change
Taxes and homeowners-insurance premiums can change over time, so your total monthly payment can change even if the principal-and-interest portion of a fixed-rate mortgage does not.
Use the Loan Estimate
For a specific mortgage offer, look at the Projected Payments section on page 1 of the Loan Estimate. That is where the lender's estimated total monthly payment is laid out.
Quick PITI estimator
This is an educational estimate—not a lender quote. Enter the assumptions you actually want to test.
Principal + interest$0
Property taxes$0
Homeowners insurance$0
Estimated PITI$0
Mortgage insurance / PMI$0
HOA / condo dues$0
Estimated all-in housing payment$0
Not included: utilities, maintenance, repairs, supplemental insurance such as flood coverage, or other property-specific expenses.
Why this matters when comparing homes
Two homes with the same purchase price can produce different monthly carrying costs because property taxes, homeowners-insurance premiums, association dues and mortgage-insurance requirements can differ. That is why a useful affordability conversation starts with the all-in monthly housing cost, not just the advertised principal-and-interest payment.
Then check the property-tax side →Primary references
Consumer Financial Protection Bureau — What is PITI? ↗CFPB — Principal & interest vs. total monthly payment ↗CFPB — Loan Estimate explainer ↗
Educational only: Loan structures, escrow requirements, taxes, insurance and mortgage-insurance rules vary. Use your lender's Loan Estimate and property-specific figures for an actual purchase decision.