PITI
FinancingPITI stands for Principal, Interest, Taxes, and Insurance — the four parts that make up a typical monthly mortgage payment. When a lender quotes “your payment,” they usually mean PITI, because most loans collect property taxes and homeowner’s insurance in an escrow account alongside the principal and interest, then pay those bills on your behalf when they come due.
Why it matters. “P&I” (principal + interest) is only the loan portion. The full PITI is the real cash that leaves your account every month — and it is what lenders use to qualify you and what an investor must subtract when analyzing cashflow. Underwriting a rental on P&I alone overstates your profit, because taxes and insurance are unavoidable and often rise over time.
| Component | Monthly |
|---|---|
| Principal + Interest (P&I) | $1,300 |
| Property taxes (escrowed) | $250 |
| Homeowner’s / landlord insurance | $90 |
| Total PITI | $1,640 |
You may also see PITIA, which adds Association dues (HOA); on some loans private mortgage insurance (PMI) is escrowed too. Whatever the label, model the full payment — not just P&I — or your numbers will lie to you.
For how lenders weigh the payment against rental income, see DSCR loans explained and finding cashflow rentals.