What Is PITI?
PITI stands for Principal, Interest, Taxes, and Insurance — the four components that make up a typical monthly mortgage payment. Lenders use PITI to determine whether you can afford a home, because it represents the true monthly cost of owning property, not just the loan repayment. This calculator estimates your full monthly PITI payment from your loan amount, interest rate, term, annual property tax, and annual homeowners insurance.
How to Use This Calculator
Enter the loan amount (the amount you are borrowing, not the home price), your annual interest rate, and the loan term in years. Then add your yearly property tax bill and your annual homeowners insurance premium. The calculator divides taxes and insurance by 12 and adds them to the amortized principal-and-interest payment to give your total monthly PITI.
The Formula Explained
The principal-and-interest portion uses the standard amortization formula
$$\text{PITI} = L \cdot \frac{r}{1-(1+r)^{-n}} + \frac{\text{Annual Tax}}{12} + \frac{\text{Annual Insurance}}{12}$$where \(P\) is the loan amount, \(r\) is the monthly interest rate (annual rate ÷ 12 ÷ 100), and \(n\) is the total number of monthly payments (years × 12). Property tax and insurance are simply the annual figures divided by 12. Adding all three gives PITI.
Worked Example
Suppose you borrow $300,000 at 6.5% for 30 years, with $3,600 annual taxes and $1,200 annual insurance. The monthly rate is \(0.0054167\) and \(n = 360\). Principal & interest works out to about $1,896.20. Monthly tax is $300 and monthly insurance is $100, so your total PITI is roughly $2,296.20 per month.
FAQ
Does PITI include PMI or HOA fees? No. This calculator covers principal, interest, taxes, and insurance only. Private mortgage insurance (PMI) and HOA dues are separate and would add to your monthly cost.
Should I enter the home price or the loan amount? Enter the loan amount — the home price minus your down payment.
Why divide taxes and insurance by 12? These are usually billed annually but escrowed monthly by your lender, so dividing by 12 reflects the monthly portion held in escrow.
