The four components of a monthly mortgage payment. Principal refers to the part of the monthly payment that reduces the remaining balance of the mortgage. Interest is the fee charged for borrowing money. Taxes and insurance refer to the amounts that are paid into an escrow account each month for property taxes and mortgage and hazard insurance.

The four components of a monthly mortgage payment. Principal is the portion of the payment that actually reduces the balance of the loan.

The four parts of many periodic loan payments.

The components that make up the total monthly loan payment on your mortgage loan.

The monthly payment that is applied toward the loan balance, accrued interest and escrow account. Principal, interest, taxes and insurance are the four major components of a regular monthly mortgage payment. Payment for principal and interest is considered PI (principal and interest).

The four major costs that a home owner's mortgage payment covers. Lenders use PITI in two ways: (1) With most mortgage plans, the lender collects your monthly mortgage payment that covers the loan principal and interest, as well as one-twelfth of your property taxes and hazard insurance. The lender puts the taxes and insurance into a separate escrow account, and pays off these bills when they become due as a way to protect the loan. (2) Before you apply for a home loan, lenders use a ball park estimate of your expected PITI to calculate your back ratio and front ratio. Lenders use these ratios as guidelines to find out if you qualify for a loan.

Payment amount calculated to include the principal, interest, taxes and insurance on an amortizing loan and represents the borrower's actual monthly mortgage-related expenses.

Also called monthly housing expense.