PITI stands for principal, interest, taxes and insurance. These are four common components used when describing a monthly mortgage payment.

Are property taxes included in the mortgage payment?

Property taxes may be included when the mortgage has an escrow account. The mortgage servicer generally collects a monthly amount and uses the escrow funds to pay the property-tax bill when it becomes due. Without escrow, the homeowner generally pays the taxing authority directly.

Is homeowners insurance included in the mortgage payment?

Homeowners insurance may be collected monthly through an escrow account. The insurance policy remains a separate contract between the homeowner and the insurance carrier.

Is PMI included in the monthly mortgage payment?

Monthly borrower-paid private mortgage insurance is generally included in the amount collected by the mortgage servicer while PMI is required.

Can I pay property taxes and homeowners insurance myself?

Some mortgages permit an escrow waiver when the borrower and transaction meet applicable requirements. Other loan programs or higher loan-to-value transactions may require an escrow account.

Is flood insurance included in the mortgage payment?

Required flood insurance may be collected through escrow, although the treatment depends on the property, mortgage program, policy and servicer requirements.

Are utilities included in the mortgage payment?

No. Electricity, natural gas, water, sewer, trash service, internet and similar utilities are generally paid separately from the mortgage payment.

Does the principal portion reduce the mortgage balance?

Yes. The principal portion of an amortizing mortgage payment reduces the outstanding loan balance.

Why is more interest paid early in a mortgage?

Mortgage interest is calculated using the outstanding principal balance. Because the balance is highest near the beginning of the loan, a larger portion of the scheduled payment generally goes toward interest during the early years.

Do FHA mortgage payments include mortgage insurance?

FHA loans generally include an annual mortgage insurance premium paid through monthly installments. An upfront mortgage insurance premium may also be financed into the loan or paid at closing.

How are Kansas property taxes estimated for a mortgage payment?

Kansas real-estate taxes are affected by county appraisal, assessed value and local mill levies. The amount may vary by county, municipality, school district and other taxing jurisdictions, so a property-specific estimate is more useful than a statewide average.

How are Missouri property taxes estimated for a mortgage payment?

Missouri real-estate taxes are affected by county assessment and local tax levies. The amount varies by property location, municipality, school district and other taxing jurisdictions.

What Is Included in a Mortgage Payment? KS & MO Guide

Q: Are HOA dues included in the mortgage payment?

HOA dues are usually not included in the amount collected by the mortgage servicer. They are commonly paid directly to the homeowners association, although lenders generally consider recurring HOA dues when evaluating the borrower's total housing expense.

Q: Why did my mortgage payment increase?

Common reasons for a mortgage-payment increase include higher property taxes, increased homeowners insurance premiums, an escrow shortage, changes in mortgage insurance or an interest-rate adjustment on an adjustable-rate mortgage.

Q: Can a fixed-rate mortgage payment change?

Yes. The scheduled principal-and-interest portion of a fixed-rate mortgage generally remains stable, but the total payment may change because of property taxes, homeowners insurance, mortgage insurance and escrow shortages.

Q: What is an escrow shortage?

An escrow shortage occurs when the projected escrow-account balance is below the amount needed to pay expected property taxes, insurance premiums and required reserves. The shortage may be collected as a lump sum or through a higher monthly payment.

Monthly Mortgage Payment Breakdown

Estimate the payment collected by the servicer and the broader monthly housing expense.

Principal & Interest—

Estimated monthly loan payment.

Taxes & Insurance—

Estimated monthly escrow portion.

Servicer Payment—

P&I, escrow and mortgage insurance.

Total Housing Expense—

Includes HOA and other entered costs.

Principal & interest—

Property taxes—

Homeowners insurance—

Mortgage insurance—

HOA and other costs—

Enter your estimates to distinguish the servicer payment from the broader housing expense.

Educational estimate only. Actual taxes, insurance, escrow, HOA dues and mortgage-insurance charges vary.

Explore This Mortgage Payment Guide

Jump directly to the topic you need.

What Does PITI Mean?

PITI is shorthand for four common components of a monthly mortgage payment.

P

Principal

Reduces the outstanding mortgage balance.

I

Interest

The cost of borrowing the lender's money.

T

Taxes

Local real-estate taxes that may be escrowed.

I

Insurance

Homeowners and applicable mortgage insurance.

PITI is not always the full housing expense.

HOA dues, flood insurance, maintenance, utilities and special assessments may be paid separately.

Principal and Interest

Principal and interest form the loan-payment portion of an amortizing mortgage. Principal reduces the balance, while interest compensates the lender for providing the funds.

Early in a fixed-rate mortgage, more of the scheduled payment generally goes toward interest. As the loan amortizes, more goes toward principal.

The principal-and-interest amount generally remains stable on a fixed-rate loan, but it may change on an adjustable-rate mortgage.

Use our mortgage calculators to estimate principal and interest.

Property Taxes in the Monthly Payment

Property taxes are local expenses and can change even when the mortgage rate is fixed.

Local jurisdictions

County, city, school district and other levies affect the final bill.

Assessed value

Taxable value may differ from the purchase price and may change after reassessment.

Monthly escrow estimate

The servicer may collect approximately one-twelfth of the expected annual bill each month.

Do not rely only on the seller's current tax bill.

The seller may have exemptions, an older assessed value or a partial-year bill. Use a property-specific estimate.

Homeowners Insurance

Lenders generally require adequate property insurance. When escrow is used, the servicer commonly collects a monthly amount toward the annual premium.

Premiums can change based on coverage, deductible, property characteristics, claims history, carrier pricing, location and weather exposure.

Learn more in our homeowners insurance guide.

How an Escrow Account Works

Escrow spreads certain annual housing expenses across monthly payments.

1

Monthly collection

The servicer collects estimated taxes and insurance.

2

Funds held

The money remains in escrow until bills become due.

3

Bills paid

The servicer pays eligible taxes and insurance.

4

Annual analysis

Projected collections are compared with expected bills and reserves.

Escrow shortage

A shortage may be collected as a lump sum or through a higher monthly payment.

Escrow surplus

A qualifying surplus may result in a refund, depending on the account and amount.

Initial escrow deposit

Funds collected at closing help prepare for upcoming tax and insurance bills.

Mortgage Insurance and Program Fees

The loan type determines whether a monthly insurance or guarantee charge may apply.

Loan Type	Monthly Charge	General Treatment
Conventional	Private mortgage insurance may apply.	Often associated with less than 20% down and may be removable under applicable rules.
FHA	Annual mortgage insurance is commonly paid monthly.	Duration depends on the loan terms and FHA requirements.
VA	No monthly PMI.	A one-time funding fee may apply unless the borrower is exempt.
USDA	An annual guarantee fee is commonly paid monthly.	USDA program rules apply rather than conventional PMI rules.

Review our Private Mortgage Insurance guide.

Are HOA Dues Included in the Mortgage Payment?

HOA dues are part of the total housing expense, but they are usually paid directly to the association rather than collected by the mortgage servicer.

Lenders commonly include recurring HOA dues when evaluating the debt-to-income ratio.

Buyers should also review initiation fees, special assessments, planned increases and included services.

What Is Usually Not Included?

These expenses may still affect the true cost of homeownership.

Utilities

Electricity, gas, water, trash and internet are generally separate.

Repairs and Maintenance

Routine upkeep and unexpected repairs are homeowner expenses.

Lawn and Pest Services

Exterior maintenance contracts are generally separate.

Flood Insurance

It may be escrowed or billed separately, depending on the loan and policy.

Optional Protection

Home warranties and optional insurance products are generally separate.

Special Assessments

HOA and municipal assessments may be separate from regular dues and taxes.

Illustrative Monthly Payment Example

This separates the servicer payment from the total housing expense.

Principal and interest$2,275

Property taxes$475

Homeowners insurance$185

Mortgage insurance$145

Estimated servicer payment$3,080

HOA dues paid separately$75

Total estimated housing expense$3,155

Why Can a Fixed-Rate Mortgage Payment Change?

The rate may remain fixed while taxes, insurance and other components change.

01

Property-tax changes

Reassessment or levy changes affect escrow.

02

Insurance changes

Carrier pricing and coverage changes affect the premium.

03

Escrow shortages

A shortage may be spread over future payments.

04

Mortgage insurance

PMI may end or program charges may change.

05

HOA increases

The broader housing expense may rise even if dues are paid separately.

06

Adjustable rates

An ARM payment can change when the interest rate adjusts.

Kansas and Missouri Mortgage Payment Considerations

Local property taxes and insurance vary substantially across the Kansas City metro.

KS

Kansas

County appraisal and local mill levies affect real-estate taxes.
School district, city and other local boundaries affect the bill.
Johnson County and nearby counties may produce materially different estimates.
New construction or reassessment can make the seller's current bill less predictive.

MO

Missouri

County assessment and local tax levies affect real-estate taxes.
Jackson, Clay, Platte and Cass County estimates can differ.
Municipal and school-district boundaries affect the bill.
Personal property tax is separate from real-estate tax and is not part of the mortgage payment.

Use a property-specific estimate.

Combine the proposed loan terms with current taxes, insurance, HOA and mortgage-insurance information for the specific property.

Mortgage Payment FAQs

Answers to common questions about mortgage and housing expenses.

What is included in a mortgage payment?

A mortgage payment commonly includes principal and interest. It may also include escrowed property taxes, homeowners insurance and mortgage insurance. HOA dues and other expenses are often paid separately.

What does PITI mean?

PITI stands for principal, interest, taxes and insurance.

Are property taxes included?

They may be when the mortgage has an escrow account. Without escrow, the homeowner generally pays the taxing authority directly.

Is homeowners insurance included?

The premium may be collected monthly through escrow, but the policy is a separate contract with the carrier.

Are HOA dues included?

Usually not. HOA dues are commonly paid directly to the association, although lenders consider them during qualification.

Is PMI included in the payment?

Monthly borrower-paid PMI is generally included in the amount collected by the servicer while required.

Why did my mortgage payment increase?

Common reasons include higher property taxes, increased insurance, an escrow shortage, mortgage-insurance changes or an adjustable rate.

Can a fixed-rate payment change?

Yes. Principal and interest may remain fixed while taxes, insurance and escrow requirements change.

What is an escrow shortage?

An escrow shortage occurs when the projected account balance is below the amount needed for expected bills and reserves.

Can I pay taxes and insurance myself?

Some loans permit an escrow waiver when applicable requirements are met. Other programs or transactions may require escrow.

Is flood insurance included?

Required flood insurance may be escrowed, but treatment depends on the property, loan and servicer.

Are utilities included?

No. Utilities are generally paid separately.

Does principal reduce the balance?

Yes. The principal portion reduces the outstanding mortgage balance.

Why is more interest paid early?

Interest is calculated on the outstanding balance, which is highest near the beginning of the loan.

Do FHA payments include mortgage insurance?

FHA loans generally include an annual mortgage insurance premium paid through monthly installments.

Do VA loans include monthly PMI?

No. VA-backed loans do not require monthly PMI, although a funding fee may apply unless the borrower is exempt.

How are Kansas property taxes estimated?

Kansas taxes are affected by county appraisal, assessed value and local mill levies. Use a property-specific estimate.

How are Missouri property taxes estimated?

Missouri taxes are affected by county assessment and local levies. Amounts vary by property and jurisdiction.

Related Mortgage Resources

Continue learning about mortgage payments and homeownership costs.

Mortgage CalculatorsEstimate principal, interest and affordability. Mortgage Pre-ApprovalReview estimated payments before shopping. Mortgage ProcessFollow the loan through closing. Escrow AccountsUnderstand monthly tax and insurance collections. Homeowners InsuranceLearn about coverage and lender requirements. Private Mortgage InsuranceReview PMI costs and removal. Debt-to-Income RatioSee how housing payments affect qualification. Mortgage FAQsGet answers to common questions.