What does PITI mean in a mortgage payment?

PITI stands for Principal, Interest, Taxes, and Insurance — the four components of a full monthly mortgage payment. Principal reduces your loan balance, interest is the lender's charge, taxes are your property tax escrowed monthly, and insurance covers both homeowners insurance and PMI (if your down payment is below 20%). This calculator computes all four so you see your true monthly cost.

What is PMI and when can I remove it?

Private Mortgage Insurance (PMI) protects the lender if you default. It's required when your down payment is less than 20% of the home's purchase price. Once you've paid your loan balance down to 80% of the home's original value (or appraised value), you can request PMI cancellation under the Homeowners Protection Act. PMI typically costs 0.2%–1% of the loan balance per year.

How is property tax calculated in my mortgage?

Property tax is assessed annually by your local government based on your home's assessed value. Most lenders collect 1/12 of your annual property tax bill each month into an escrow account and pay the tax authority on your behalf. The US average effective property tax rate is about 1.1%, but it varies widely — from 0.3% in some states to over 2.5% in others. Enter your county's rate for an accurate estimate.

Should I choose a 15-year or 30-year mortgage?

A 15-year mortgage pays off twice as fast and saves tens of thousands in interest, but monthly payments are roughly 30–40% higher. A 30-year loan has lower monthly payments, offering more cash flow flexibility. Use this calculator to compare: set the loan term to 15 years vs. 30 years and watch the interest totals change dramatically.

How does a larger down payment affect my mortgage?

A larger down payment reduces your loan balance (lowering monthly P&I and total interest), and once you cross the 20% threshold it eliminates PMI entirely. On a $450,000 home, eliminating PMI at 0.5% saves about $150/month — over $54,000 across a 30-year term.