Mortgage Payment Guide
A loan quote may show principal and interest, while a household budget needs the full recurring cost of owning the property. This example shows the difference line by line.
By Ethan Hayes Published
For a $400,000 home with 20% down at 6.5% for 30 years, principal and interest is $2,022.62 per month. Adding taxes and insurance produces PITI of $2,555.95, before HOA dues and maintenance.
This worked example assumes $4,800 in annual property taxes, $1,600 in annual homeowners insurance, $100.00 in monthly HOA dues, and a $200.00 monthly maintenance reserve. HOA and maintenance are shown separately from PITI. Local figures should replace these assumptions.
| Payment item | Monthly amount |
|---|---|
| Principal and interest | $2,022.62 |
| Property taxes | $400.00 |
| Homeowners insurance | $133.33 |
| HOA dues | $100.00 |
| PITI | $2,555.95 |
| PITI plus HOA and maintenance reserve | $2,855.95 |
Use P&I to isolate the cost of borrowing and compare loan offers. Use PITI to estimate the recurring payment associated with the property. Use the full ownership budget to decide whether the home fits after maintenance, HOA, utilities, and reserves.
Replace the example tax and insurance amounts with the property tax record and an insurance quote. Confirm whether PMI applies, inspect HOA documents, and set a maintenance reserve appropriate for the home age and condition.
The loan portion is principal and interest. A projected full payment may also collect property taxes, homeowners insurance, mortgage insurance, and sometimes HOA-related amounts. Maintenance and utilities are usually separate household costs.
PITI adds one-twelfth of annual property taxes and homeowners insurance to principal and interest. Those costs are tied to the property and local insurance market, not just the loan rate.
Usually not. Maintenance is a separate ownership cost that should be included in an affordability budget even when it is not collected by the lender.
Worked examples are calculated from the assumptions shown on this page, and results are rounded only for display. Use the linked calculator to test a complete scenario with your own property and financing estimates.
These estimates are for educational purposes and are not lending, tax, legal, or financial advice. Actual mortgage terms, property costs, investment returns, and home values can differ materially.
This example is a starting point. Change the inputs in the calculator before making a housing decision.
Open PITI mortgage calculator