Budgeting
The true monthly cost of a home: PITI, PMI and HOA explained
Your mortgage payment is more than principal and interest. Learn the pieces that make up a real monthly housing budget.
Dana Whitfield
NMLS #XXXXXX
Online listings often show a single payment estimate. In real life, your monthly housing cost has several parts, and knowing them helps you set a comfortable budget.
PITI in plain English
Principal: the part that pays down your loan balance
Interest: what you pay the lender to borrow
Taxes: property taxes, often collected monthly in an escrow account
Insurance: homeowners insurance, also usually escrowed
Mortgage insurance and HOA dues
With a smaller down payment, you may also pay mortgage insurance. Condos and some neighborhoods add homeowners association dues, which aren’t part of the loan but still count toward what lenders review.
Leave room for the rest
Utilities, maintenance and repairs aren’t in your mortgage payment, but they are part of owning a home. Many owners set aside a little each month for the unexpected. Our mortgage payment calculator breaks down each piece for you.
General information
This guide is general education, not financial, legal or tax advice. Talk with a licensed loan officer about your situation.