Compute the monthly PITI total of a mortgage — principal, interest, property tax, and insurance — to assess the true monthly cost of homeownership.
Input Data
Results
At a glance:PITI is the sum of a mortgage's monthly principal and interest plus the monthly portions of property tax and insurance, representing the full monthly housing cost.
Formula
principalAndInterest = P × r·(1+r)^n / ((1+r)^n − 1) (r = annualRate%/12, n = termYears×12)
monthlyTax = annualTax / 12
monthlyInsurance = annualInsurance / 12
piti = principalAndInterest + monthlyTax + monthlyInsurance
$$\text{P\&I} = \dfrac{P \times r (1+r)^n}{(1+r)^n - 1}, \quad r = \dfrac{\text{annual rate}}{12}$$$$\text{PITI} = \text{P\&I} + \dfrac{\text{Annual Tax}}{12} + \dfrac{\text{Annual Insurance}}{12}$$How to Use
- Enter the loan principal, annual rate, and term.
- Enter the annual property tax and insurance.
- Review the PITI and its components.
FAQ
What is PITI and why is it more important than the mortgage payment?
PITI = Principal + Interest + Tax + Insurance. It reflects the true monthly cost of homeownership, not just the mortgage instalment. Ignoring tax and insurance understates the burden, so PITI gives a more accurate view of affordability.
Hong Kong has no US-style property tax — what should I enter for 'Tax'?
Hong Kong does not levy an annual property tax on the building value like the US, but it does have rates, government rent, and (for let-out property) property tax. You can enter your expected annual rates and government rent into the 'Annual Property Tax / Rates' field as an estimate.
How do banks use PITI to assess my borrowing capacity?
Banks often apply the '28% rule': monthly PITI should not exceed 28% of gross monthly income. The higher the PITI, the lower the loan you can afford. Calculating PITI helps you pre-assess your chances of passing the debt-servicing ratio and stress test.
Since Hong Kong has no US-style property tax, what goes in PITI's 'T'?
PITI's 'T' (Tax) comes from the US, where most states levy an annual property tax on assessed value — substantial and a key monthly cost, hence in PITI. Hong Kong's tax system is different: there is no annual tax on building value, but there are recurring property-related outlays you can put in the 'Annual Property Tax / Rates' field. Mainly: rates — charged by the government on the rateable value (paid quarterly, by owner-occupiers and landlords alike); government rent / crown rent — some tenancies pay government rent (often 3% of rateable value) or old-system land tax; and if the property is let, the owner pays property tax on the rental income (not relevant to owner-occupiers). So owner-occupiers can enter their expected annual rates + government rent; landlords may also consider property tax. Note there is also a one-off stamp duty on purchase, but that is not a monthly recurring cost and is outside PITI's 'T'. Actual rates/rent depend on the rateable value and any relief measures, so use government figures; this calculator only does an even-split estimate.
How is PITI related to the bank's debt-to-income ratio and stress test?
PITI is the basis for assessing mortgage affordability, and the bank's debt-to-income (DTI) ratio and stress test compare PITI (or at least the mortgage portion) against your income. The DTI measures monthly debt payments as a share of income; internationally the '28% rule' (PITI ≤ 28% of gross income) and '36% rule' (total debt ≤ 36%) are common references, while Hong Kong banks set their own debt-servicing ratio (DSR) cap (e.g. mortgage payment ≤ some percentage of income, counting other loans too). Higher PITI means a lower approvable loan. The stress test: the HKMA has required banks to assume an interest-rate rise and check the post-rise DSR still meets a stricter cap (e.g. ≤ 60%), so how much you can borrow often hinges on the stressed, not current, payment. These rules shift with policy, so follow the bank's and HKMA's current requirements. Before buying, compare PITI against your income to gauge the DTI and leave a buffer for rate rises.
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.