PITI
What is piti?
PITI stands for principal, interest, taxes and insurance — the four components of a typical escrowed mortgage payment. It is the number that actually leaves your bank account each month.
How it is calculated
PITI = principal + interest + (annual property tax ÷ 12) + (annual insurance ÷ 12)
What it means in practice
Lenders underwrite against PITI, not against principal and interest, because taxes and insurance are obligations that come with the property whether or not they are escrowed.
PITI as normally quoted excludes HOA dues, even though lenders include those dues in qualifying ratios. This calculator shows HOA dues as a separate line so nothing is hidden.
Property taxes and insurance vary dramatically by location. Two identical homes with identical loans can differ by hundreds of dollars a month in PITI.