Definition
The four parts of a full monthly mortgage payment: loan principal, interest, property taxes, and homeowners insurance, with the last two usually collected through escrow. Lenders qualify buyers on the whole PITI number, not just principal and interest.
Why it matters
Shopping with only principal and interest in mind understates the real payment by hundreds of dollars a month. PITI is the number that must fit the budget, and the taxes and insurance pieces keep rising even on a fixed-rate loan.
Example
A $350,000 loan at 6.5% runs about $2,212 in principal and interest, but $500 of monthly property tax and $150 of insurance bring PITI to roughly $2,862. Add $200 of HOA dues and the true monthly cost clears $3,000.
Put it into practice
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.