What is in a monthly mortgage payment?

Principal, interest, taxes, insurance and dues: what each part is, and which parts can change.

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A mortgage payment is usually several smaller payments rolled into one. Knowing the parts helps you compare loans fairly and plan for changes.

Principal and interest

Principal is the amount you borrowed, and interest is what the lender charges for lending it. On a fixed-rate loan the combined principal and interest payment stays the same for the whole term. Early payments are mostly interest, and later payments are mostly principal.

Taxes, insurance and dues

Property taxes and homeowners insurance are often collected with your payment and held in an escrow account until the bills are due. Both can rise or fall from year to year, so the total payment can change even on a fixed-rate loan. If you live in a community with an HOA, those dues are a separate monthly cost to include in your budget.

With a down payment under 20% you may also pay mortgage insurance. Ask your loan officer whether it applies and when it can end.

The Payment tab of the planner lists each part so you can see the total. Figures are illustrative and are not an offer or a commitment to lend.

Rates and figures are illustrative, not a rate quote, loan offer or commitment to lend. A pre-approval is not a commitment to lend.

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Enter a price, a down payment and a term in the Payment Planner. Figures are illustrative only.

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