Ever wonder what makes up the number on your monthly mortgage statement? It’s not just your loan principal and interest. Lenders use an acronym — PITI — to break down the full payment you’ll make each month. Let’s walk through exactly what each letter means and why it matters, especially here in Northern Virginia.
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For a quick 30-second overview, check out this short video on YouTube:
What’s in Your Mortgage Payment? PITI Explained
Breaking Down PITI: The Building Blocks of Your Mortgage Payment
Your mortgage payment is built from four core components: Principal, Interest, Taxes, and Insurance (PITI).
• Principal – The portion of your payment that reduces what you owe (the loan balance). Over time, more of your payment is allocated toward principal rather than interest.
• Interest – What the lender charges you for borrowing the money.
• Taxes – Property taxes collected by your county and paid from your escrow account.
• Insurance – Homeowners and sometimes mortgage or flood insurance, depending on location.
Additional PITI Insights & Nuances to Know
Equity and Amortization:
• As you pay down principal, your equity increases. Early in the loan, most of your payment goes to interest.
Escrow & Payment Adjustments:
• Taxes and insurance can change yearly, so lenders analyze escrow annually.
Mortgage Insurance:
• PMI may be required under 20% down; it can be removed when your loan-to-value reaches 80%.
Other Costs:
• HOA dues, maintenance, utilities, and closing costs are not part of PITI.
Why PITI Matters — and How It Impacts You
Understanding PITI helps you see the true cost of homeownership and plan more accurately:
• Set realistic monthly budgets
• Compare homes by total payment, not just price
• Plan for escrow adjustments and PMI removal
What This Means for Homebuyers in Northern Virginia
• Property taxes vary widely by county — Fairfax, Arlington, Loudoun, and Prince William all differ.
• Flood insurance may apply to certain areas.
• Rising property values can help you remove PMI sooner.
FAQs About PITI
Q: Can my mortgage payment change after closing?
A: Yes, if taxes or insurance change, your escrow adjusts.
Q: Does PITI include HOA fees?
A: No, HOA dues are paid separately.
Q: When can I stop paying PMI?
A: Typically once your loan-to-value reaches 80%.
Let’s Build Your True Payment Estimate
If you’re shopping homes or preparing to buy, knowing what your PITI will look like gives you confidence — and helps avoid surprises. I’d be happy to walk you through your projected costs, run side-by-side comparisons, and strategize how to save or accelerate equity.
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Written by John Pyne, SVP Regional Manager and Mortgage Advisor based in Northern Virginia.
Specializing in first-time buyers, VA loans, and strategic financing solutions for families across the DC Metro area.