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Stands for principal, interest, taxes, and insurance, the four main parts of monthly mortgage obligations.

Principal, Interest, Taxes, and Insurance

The components of a real estate owner's mortgage payment. When considering whether to loan money for a mortgage, a bank often considers what the PITI will be as a percentage of the potential borrower's gross monthly income. Generally speaking, mortgage banks prefer PITI to be 28% or less of the borrower's income.


PITI is an acronym for principal, interest, taxes, and insurance -- the four elements of a monthly mortgage payment.

Principal is the loan amount. Interest is the rate at which the finance charge you pay for borrowing is calculated. Taxes are the real estate taxes for which you are responsible, and insurance is the homeowners insurance that your lender requires you to have.

If your lender also requires private mortgage insurance (PMI), this amount may be included in the monthly payment or paid separately. Lenders use PITI to calculate your monthly mortgage obligation and how much you can afford to borrow. Most lenders prefer that you spend no more than 28% of your gross monthly income on PITI.


A mortgage loan term for principal,interest,taxes,and insurance.


Principal, interest, taxes, and insurance.

These are the components of the monthly housing expense. See Qualification/Meeting Income Requirements/Expense Ratios.