Key takeaways
- Principal and interest (P&I) repays the loan and pays the lender for borrowing the money.
- PITI adds one-twelfth of annual property taxes and homeowners insurance on top of P&I.
- Payment examples based on advertised rates and basic calculators often show P&I only, not the full PITI payment.
Two numbers describe the same mortgage in different ways. Principal and interest, often shortened to P&I, is the payment that repays what you borrowed and compensates the lender. PITI is a wider figure that adds property taxes and homeowners insurance on top of P&I. Confusing the two is one of the most common reasons a homebuyer's budget comes in lower than their actual monthly bill.
P&I vs. PITI, defined
| Term | What it includes |
|---|---|
| P&I (principal and interest) | Loan repayment and interest cost only |
| PITI | P&I, plus one-twelfth of annual property taxes and homeowners insurance |
| Total monthly payment | PITI, plus PMI and HOA dues when they apply |
Our PITI calculation guide walks through the formula in detail. The short version: P&I is the smallest of these three figures, and PITI sits in between P&I and the full total monthly payment a lender may collect.
Why the gap between P&I and PITI matters
Advertised mortgage rates, many online rate-comparison tools, and basic loan calculators typically show P&I because it isolates the cost of borrowing and makes different loans easier to compare on rate alone. Property taxes and insurance premiums are specific to the property and the buyer's insurer, so they are usually left out of a headline rate quote.
That is useful for comparing interest rates, but it can understate the real monthly cost of owning a specific home. A buyer who budgets to the quoted P&I payment, without separately accounting for taxes and insurance, can be surprised by a materially higher bill once escrow is set up.
Side-by-side example
Consider a $400,000 home with an $80,000 down payment (20% down), a 30-year fixed mortgage at 6.5%, $4,800 in annual property taxes, and $1,600 in annual homeowners insurance.
| Payment description | Monthly amount |
|---|---|
| P&I only | $2,022.62 |
| Taxes and insurance added | $533.33 |
| PITI | $2,555.95 |
In this example, PITI is $533.33 higher than P&I alone each month, about 26.4% more than the loan payment by itself. Open the same example in the calculator to see both figures for your own numbers.
What stays fixed and what does not
On a standard fixed-rate mortgage, the P&I payment does not change for the life of the loan. What shifts each month is the split between principal and interest: early payments are interest-heavy, and later payments repay more principal, even though the total P&I amount stays constant.
PITI is different because taxes and insurance are not fixed. A county reassessment or an insurance renewal can raise or lower those costs, which changes PITI even though P&I has not moved. An escrow account review can then adjust the monthly amount collected to match.
Using P&I and PITI to compare loan offers
When comparing loan offers, a lower advertised P&I payment does not automatically mean a lower total monthly cost. Two lenders quoting the same rate can still produce different PITI figures if their estimated tax and insurance escrow amounts differ, or if one includes PMI and the other does not.
- Compare P&I side by side to isolate the effect of rate and loan term.
- Compare PITI, or the full projected payment, to see the realistic monthly cost.
- Check the Projected Payments section of each Loan Estimate, which should break out P&I, taxes, insurance, and mortgage insurance separately.
Common questions
What does P&I mean on a mortgage?
P&I stands for principal and interest, the portion of a mortgage payment that repays the loan balance and pays the lender for borrowing the money. It does not include property taxes, homeowners insurance, PMI, or HOA dues.
Does a quoted mortgage payment show P&I or PITI?
A mortgage rate is an interest percentage, not a payment. Payment examples based on an advertised rate and many basic rate-comparison tools show P&I only. The full monthly PITI, and any total payment with PMI or HOA dues added, is usually shown separately in a Loan Estimate or closing disclosure.
Why is my actual mortgage payment higher than the P&I I calculated?
A basic loan calculator often computes P&I alone. If your lender collects property taxes, homeowners insurance, or PMI through escrow, those amounts are added on top, so the real monthly payment is higher than P&I by itself.
Does the P&I portion of my payment change over time?
On a standard fixed-rate mortgage, the P&I payment stays the same for the life of the loan, even though the split between principal and interest shifts each month. Property taxes and insurance, by contrast, can change and adjust the PITI total.
Sources
Run your own numbers
Change the price, rate, taxes, insurance, HOA dues, and extra payments in the interactive calculator.
Continue learning
How to Calculate PITI
Learn the core formula and work through principal, interest, tax, and insurance line by line.
Read guideDoes PITI Include PMI?
See why PMI is a separate cost from PITI and when it applies to a loan.
Read guidePITI With Extra Payments
Learn which parts of a payment change when you send extra money to mortgage principal.
Read guideThis guide provides educational estimates, not lending, tax, or financial advice. Confirm loan terms and payment instructions with your lender or mortgage servicer.