<\/p>\n\n\n\n
Most mortgage calculators lie to you by omission.<\/p>\n\n\n\n
They show you principal and interest \u2014 the part of your payment that goes to the lender \u2014 and stop there. But that number is only about 70% of what you\u2019ll actually pay every month. The rest is taxes, insurance, and possibly PMI and HOA dues. Lenders call the full number PITI<\/strong>, and it\u2019s the number that actually determines whether you can afford a home.<\/p>\n\n\n\n P \u2014 Principal<\/strong> I \u2014 Interest<\/strong> T \u2014 Taxes<\/strong> I \u2014 Insurance<\/strong> For many buyers, PITI isn\u2019t the whole story:<\/p>\n\n\n\n PMI (Private Mortgage Insurance)<\/strong> is added to conventional loans when you put down less than 20%. It typically costs 0.3\u20131% of the loan per year and protects the lender \u2014 not you \u2014 if you default. The good news: PMI cancels automatically once you reach roughly 20% equity.<\/p>\n\n\n\n MIP (Mortgage Insurance Premium)<\/strong> is the FHA version of mortgage insurance. Unlike PMI, if you put down less than 10% on an FHA loan, MIP lasts for the life of the loan. The only exit is refinancing to a conventional loan later.<\/p>\n\n\n\n HOA Dues<\/strong> apply in many condos, townhomes, and planned communities. They\u2019re not technically part of PITI, but lenders count them when qualifying you \u2014 and your monthly budget absolutely should too.<\/p>\n\n\n\n Here\u2019s a real example. A $400,000 home in Tennessee with 10% down at 6.75%:<\/p>\n\n\n\n That\u2019s a $576\/month difference between what most calculators show and what you\u2019ll actually write a check for. Multiply that over a year and it\u2019s nearly $7,000 in surprises.<\/p>\n\n\n\n You need four numbers:<\/p>\n\n\n\n Add them together and you have PITI.<\/p>\n\n\n\n The faster way: use our free calculator at piti.com<\/a>, which pulls real county tax records by address, fills in live weekly rates, and handles FHA and VA math automatically. English and Spanish, no sign-up required.<\/p>\n\n\n\n PITI is the honest version of your mortgage payment. Budget on it, qualify on it, and compare homes on it \u2014 because that\u2019s exactly what your lender will do.<\/p>\n","protected":false},"excerpt":{"rendered":" Most mortgage calculators lie to you by omission. They show you principal and interest \u2014 the part of your payment that goes to the lender \u2014 and stop there. But that number is only about 70% of what you\u2019ll actually pay every month. The rest is taxes, insurance, and possibly PMI and HOA dues. Lenders … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":34,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-12","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.piti.com\/blog\/wp-json\/wp\/v2\/posts\/12","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.piti.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.piti.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.piti.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.piti.com\/blog\/wp-json\/wp\/v2\/comments?post=12"}],"version-history":[{"count":3,"href":"https:\/\/www.piti.com\/blog\/wp-json\/wp\/v2\/posts\/12\/revisions"}],"predecessor-version":[{"id":20,"href":"https:\/\/www.piti.com\/blog\/wp-json\/wp\/v2\/posts\/12\/revisions\/20"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.piti.com\/blog\/wp-json\/wp\/v2\/media\/34"}],"wp:attachment":[{"href":"https:\/\/www.piti.com\/blog\/wp-json\/wp\/v2\/media?parent=12"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.piti.com\/blog\/wp-json\/wp\/v2\/categories?post=12"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.piti.com\/blog\/wp-json\/wp\/v2\/tags?post=12"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}What PITI Stands For<\/h3>\n\n\n\n
The portion of your payment that reduces your loan balance. In the early years of a 30-year mortgage, this is surprisingly small. On a $350,000 loan at 6.5%, your first payment puts roughly $350 toward the balance. The rest is interest.<\/p>\n\n\n\n
The lender\u2019s charge for lending you money. Interest dominates early payments \u2014 on that same loan, your first payment includes nearly $1,900 in interest. Over time, as the balance shrinks, more of each payment shifts to principal. This is called amortization.<\/p>\n\n\n\n
Property taxes are collected by your local government and vary dramatically by location. Hawaii averages around 0.3% of home value per year. New Jersey and Illinois top 2%. On a $400,000 home, that difference is $1,000 vs. $8,000 per year \u2014 or $83 vs. $667 per month. Most lenders collect property taxes monthly and hold them in escrow, paying the tax bill when it comes due.<\/p>\n\n\n\n
Homeowners insurance protects your home against fire, storms, theft, and liability. Lenders require it. Premiums vary widely by state \u2014 Florida averages over $5,000 per year due to hurricane risk, while many Midwest and Mountain states run under $1,500. Like taxes, insurance is usually escrowed and paid monthly.<\/p>\n\n\n\nWhat Gets Added on Top of PITI<\/h3>\n\n\n\n
Why the Gap Between P&I and PITI Matters<\/h3>\n\n\n\n
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How to Calculate Your Real PITI<\/h3>\n\n\n\n
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The Bottom Line<\/h3>\n\n\n\n