What PITI means
PITI stands for principal, interest, taxes and insurance, the four pieces that make up most monthly mortgage payments. Principal and interest repay the loan itself. Property taxes and homeowners insurance are bills for the house, but most lenders collect them with your payment, hold the money in an escrow account and pay the bills for you when they come due. That is why your Loan Estimate shows a higher payment than a basic mortgage calculator.
Two more costs often ride along. If you put down less than 20% on a conventional loan, the lender will usually require private mortgage insurance (PMI). Homes in an association also carry HOA dues, usually paid to the association rather than through escrow, but part of your housing budget all the same. This calculator adds everything up so you see the full monthly cost of owning the home.
How the calculator works
Each part is computed separately and then added together:
P&I = loan × r / (1 − (1 + r)−n)
property tax = home price × tax rate ÷ 12
insurance = annual premium ÷ 12
PMI = loan × PMI rate ÷ 12 (only if loan > 80% of price)
monthly payment = P&I + tax + insurance + PMI + HOA
Here r is the annual interest rate ÷ 12 and n is the number of monthly payments. Principal and interest are amortized month by month with interest rounded to the cent, using the same engine as our extra payment calculator, so the schedule shows exactly how much of each payment builds equity. Property tax is estimated from the purchase price; use the figure from the listing or tax bill when you have one.
When PMI comes off
PMI is not permanent on a conventional loan. Under the federal Homeowners Protection Act, as the Consumer Financial Protection Bureau explains, your servicer must cancel it automatically on the date your balance is scheduled to reach 78% of the home's original value, as long as you are current on payments. You can ask to cancel earlier, once the balance reaches 80%, and PMI must end after the midpoint of the loan term in any case. The calculator applies the automatic 78% rule to your original amortization schedule, removes PMI from the payment after that month and shows the date.
Extra payments or a request at 80% can end it sooner, so treat the date shown as the latest PMI should end. FHA loans charge a different mortgage insurance premium with its own rules, so this calculator is built for conventional loans.
Worked example: a $400,000 home with 10% down
Say you buy a $400,000 home with $40,000 (10%) down and borrow $360,000 at 6.5% for 30 years. The tax rate is 1.1% of value, insurance costs $1,800 a year and the lender quotes PMI at 0.5% a year.
- Principal and interest: $2,275.44 a month. In the first month, $1,950.00 of that is interest and only $325.44 is principal.
- Property tax: $400,000 × 1.1% ÷ 12 = $366.67.
- Homeowners insurance: $1,800 ÷ 12 = $150.00.
- PMI: $360,000 × 0.5% ÷ 12 = $150.00.
The total is $2,942.11 a month, about 29% more than principal and interest alone. PMI is charged for the first 109 payments, about 9 years, until the scheduled balance falls to $312,000 (78% of $400,000). That adds up to $16,350, after which the payment drops to $2,792.11. Over 30 years you would also pay about $459,164 in interest, $132,000 in tax and $54,000 in insurance, if those bills never rose.
How the down payment changes the payment
- 20% down ($80,000): the loan is $320,000, principal and interest are $2,022.62 and there is no PMI. The total is $2,539.29, about $403 a month less than with 10% down.
- 5% down ($20,000): the loan is $380,000 and the total is $3,076.86, with PMI lasting about 11 years and 3 months. In practice the PMI rate would likely be higher too, because insurers charge more as the down payment shrinks.
How much income do you need?
Lenders judge affordability with your debt-to-income ratio: monthly debt payments divided by gross monthly income. A long-standing rule of thumb keeps housing costs at or below about 28% of gross income, and all debts together around 36%, though actual limits vary by loan program and lender. The last line of the results divides your total payment by 0.28 to show the gross annual income that guideline implies, about $126,090 in the example.
Getting the inputs right
- Property tax: rates differ widely by state and county, and a sale can trigger reassessment, so check the county assessor rather than the previous owner's bill.
- Insurance: get a real quote. Premiums depend on location, rebuild cost and deductible.
- PMI: Freddie Mac says to expect roughly $30 to $70 a month per $100,000 borrowed, about 0.36% to 0.84% a year. Your Loan Estimate shows the exact premium under Projected Payments.
- Escrow changes: taxes and premiums are reviewed every year, so your payment can rise even on a fixed-rate loan. Only the principal and interest part is locked in.
Once you own the home, see how extra payments or a biweekly schedule pay the loan down faster and bring the PMI cutoff closer.
Frequently asked questions
What does PITI stand for?
Principal, interest, taxes and insurance: the four main parts of a monthly mortgage payment. Many payments also include PMI, and many homeowners pay HOA dues on top.
Is PITI the same as my mortgage payment?
Usually, if your lender collects taxes and insurance through an escrow account. Without escrow, your payment to the lender covers only principal, interest and any PMI, and you pay the tax and insurance bills yourself.
Does PITI include PMI?
Strictly no, but PMI is added to the same monthly payment, so this calculator includes it and shows the month it drops off.
How is PMI calculated?
Usually as an annual percentage of the loan amount divided by 12. At 0.5% on a $360,000 loan that is $150 a month. The rate depends on your credit score, down payment and insurer.
When does PMI go away?
On a conventional loan it is cancelled automatically when your balance is scheduled to reach 78% of the home’s original value, and you can request removal at 80%. It must also end after the midpoint of the loan term.
Why did my payment go up on a fixed-rate mortgage?
Principal and interest stayed the same, but property taxes or insurance rose, so your servicer raised the escrow part of the payment after its annual review.
What is a good housing payment-to-income ratio?
A common guideline is 28% of gross monthly income or less for housing and about 36% for all debts, but lenders and loan programs set their own limits.
Sources
- Consumer Financial Protection Bureau: What is an escrow or impound account?
- Consumer Financial Protection Bureau: What is private mortgage insurance?
- Consumer Financial Protection Bureau: When can I remove private mortgage insurance (PMI) from my loan?
- Freddie Mac (My Home): Breaking down PMI
- Consumer Financial Protection Bureau: What is a debt-to-income ratio?
- Consumer Financial Protection Bureau: Loan Estimate explainer
Last reviewed: Oct 19, 2026. See how we calculate and test. Calculations use the standard fixed-rate amortization formula with interest rounded to the cent each period.