1. What is PITI?

PITI stands for Principal, Interest, Taxes, and Insurance - the four components of a typical mortgage payment. Understanding PITI helps borrowers estimate their total monthly housing costs.

2. How Does the Calculator Work?

The calculator uses these formulas:

Where:

• \( PMT \) — Monthly principal and interest payment
• \( Loan \) — Total loan amount
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (term in years × 12)
• \( Taxes \) — Annual property tax amount
• \( Insurance \) — Annual homeowner's insurance premium

3. Importance of PITI Calculation

Details: Lenders use PITI to determine affordability. The PITI payment should typically not exceed 28% of gross monthly income for conventional loans.

4. Using the Calculator

Tips: Enter loan amount in USD, interest rate as a percentage (e.g., 3.5), loan term in years, and annual amounts for taxes and insurance.

5. Frequently Asked Questions (FAQ)

Q1: What's included in PITI?
A: Principal (loan repayment), Interest (borrowing cost), Taxes (property taxes), and Insurance (homeowner's insurance).

Q2: Are there other housing costs not in PITI?
A: Yes, PITI doesn't include HOA fees, PMI (if applicable), maintenance, or utilities.

Q3: How accurate is this calculator?
A: It provides a good estimate but actual payments may vary based on escrow requirements and insurance/tax changes.

Q4: What's the 28/36 rule?
A: A common guideline where housing (PITI) ≤28% of income and total debt ≤36% of income.

Q5: How does term length affect payments?
A: Shorter terms mean higher monthly payments but less total interest paid over the loan life.