Discover your true monthly homeownership costs with our PITI Calculator. PITI stands for Principal, Interest, Property Taxes, and Homeowner's Insurance—the core components of most mortgage payments. This essential tool helps homebuyers budget effectively and understand their financial obligations before purchasing a property.
Formula:
The PITI components combine to form your total monthly mortgage payment:
PITI = Principal & Interest (P&I) + Monthly Property Taxes (T) + Monthly Homeowner's Insurance (I)
Where:
- P&I (Principal & Interest): This is the largest portion of your mortgage payment, calculated based on your loan amount, interest rate, and term. It's the amount that goes towards reducing your loan balance and paying interest to the lender.
- T (Monthly Property Taxes): Your annual property tax liability divided by 12, often held in an escrow account by your lender.
- I (Monthly Homeowner's Insurance): Your annual homeowner's insurance premium divided by 12, also typically managed through escrow.