Use this comprehensive calculator to estimate your total monthly mortgage payment, including Principal, Interest, Property Taxes, Homeowners Insurance, and optional Private Mortgage Insurance (PITI). Understanding the full cost is the first step toward smart homeownership.
Monthly Payment Calculator (PITI)
Estimated Total Monthly Payment
Detailed Calculation Steps
Awaiting calculation…
Monthly Payment Calculator (PITI) Formula
The total monthly payment (PITI) is the sum of four components: Principal & Interest (P&I), Property Tax (T), Home Insurance (I), and Private Mortgage Insurance (PMI, if applicable).
Total Monthly Payment = M_PI + M_Tax + M_Ins + M_PMI
Where M_PI (Principal & Interest) is calculated as:
M_PI = P * [r * (1 + r)^n] / [(1 + r)^n - 1]
P = Loan Principal (Home Price - Down Payment)
r = Monthly Interest Rate (Annual Rate / 1200)
n = Number of Payments (Loan Term in Years * 12)
M_Tax = Annual Property Tax / 12
M_Ins = Annual Home Insurance / 12
M_PMI = Annual PMI / 12 (if required)
Formula Source: CFPB Home Loan Guide | Investopedia Mortgage Payment Breakdown
Variables Explained
- Home Price ($): The total purchase price of the property.
- Down Payment ($): The initial amount paid upfront, which reduces the loan principal.
- Loan Term (Years): The duration over which the loan is repaid (e.g., 15 or 30 years).
- Annual Interest Rate (%): The yearly percentage rate charged by the lender for the loan.
- Annual Property Tax ($): The yearly tax assessment from the local government.
- Annual Home Insurance ($): The yearly cost to insure the property against damage or loss.
- Annual PMI ($): Private Mortgage Insurance, typically required if the down payment is less than 20%.
Related Calculators
- Mortgage Refinance Savings Calculator
- Amortization Schedule Planner
- Rent vs. Buy Analysis Tool
- Home Equity Loan Payment Calculator
What is PITI?
PITI is a financial acronym that stands for Principal, Interest, Taxes, and Insurance. It represents the four core components of a homeowner’s total monthly housing payment. Lenders often use this total figure to determine a borrower’s ability to afford a loan, as it provides a comprehensive view of the monthly financial commitment beyond just the loan repayment.
The Principal and Interest (P&I) portion is what repays the actual loan amount and the cost of borrowing the money, respectively. This amount is fixed for the life of a fixed-rate mortgage. The Taxes and Insurance (T&I) portions, however, are variable costs that are typically collected by the lender into an escrow account and paid out annually. Because these costs can change yearly, the PITI payment can fluctuate over time.
Understanding PITI is crucial for budget planning, as a low P&I payment might be misleading if the T&I components are high. This calculator helps you look at the complete picture.
How to Calculate Monthly Payment (PITI) – Example
Let’s use an example to illustrate the calculation steps:
- Determine Loan Principal (P): Home Price $250,000, Down Payment $50,000. $250,000 – $50,000 = $200,000 (P).
- Calculate Monthly P&I: Using P=$200,000, Annual Rate 6.0% (r=0.005), and Term 30 Years (n=360 payments), the resulting P&I payment is $1,199.10.
- Calculate Monthly Tax (T): Annual Property Tax $3,000. $3,000 / 12 = $250.00 per month.
- Calculate Monthly Insurance (I): Annual Home Insurance $960. $960 / 12 = $80.00 per month.
- Calculate Monthly PMI: Since the Down Payment is 20% ($50k of $250k), PMI is not required in this example ($0.00).
- Sum the Components: $1,199.10 (P&I) + $250.00 (Tax) + $80.00 (Insurance) + $0.00 (PMI) = $1,529.10 Total Monthly Payment.
Frequently Asked Questions (FAQ)
Is PITI the only cost of homeownership?
No. PITI represents the core monthly payment but does not include other potential costs like HOA fees, utilities, routine maintenance, or emergency repairs, which must also be factored into a budget.
What is an escrow account?
An escrow account is an account managed by your lender to hold the portion of your PITI payment dedicated to Taxes (T) and Insurance (I). The lender uses this money to pay your property tax and insurance bills when they are due.
When is Private Mortgage Insurance (PMI) required?
PMI is typically required when a borrower puts down less than 20% of the home’s purchase price. It protects the lender (not the borrower) against default. It can usually be canceled once the borrower reaches 20% equity.
Why does my PITI payment change year to year?
While the Principal and Interest (P&I) portion is usually fixed, the Property Tax (T) and Home Insurance (I) rates can change annually. If your county raises property taxes or your insurance premium increases, your total PITI payment will also increase.