PITI: The 4 Things Inside Your Mortgage Payment

Your monthly mortgage payment is PITI: Principal (paying down the loan), Interest (cost of borrowing), Taxes (property tax, paid via escrow to local government), Insurance (homeowners insurance, also escrowed). Two common additions: PMI (Private Mortgage Insurance — required when down payment is below 20%, drops off at 78% LTV) and HOA dues (separate from PITI, paid directly to the homeowner association). On a $400,000 home at 7% with 10% down: P&I is ~$2,400/month, property tax ~$400, insurance ~$150, PMI ~$200, HOA varies $0-$500. Always model PITI+PMI+HOA when evaluating affordability — base P&I alone is misleading.