How is a mortgage payment calculated?

Your monthly mortgage payment is typically made up of four main components, commonly referred to as PITI:

Principal: The portion of your payment that goes toward paying down the actual balance of the loan.
Interest: The cost of borrowing the money, paid to your lender.
Taxes: Property taxes assessed by your local government, usually collected in an escrow account.
Insurance: Homeowner's insurance to protect your property against damage, also typically paid via escrow.

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How is a mortgage payment calculated?

Your monthly mortgage payment is typically made up of four main components, commonly referred to as PITI:

Principal: The portion of your payment that goes toward paying down the actual balance of the loan.
Interest: The cost of borrowing the money, paid to your lender.
Taxes: Property taxes assessed by your local government, usually collected in an escrow account.
Insurance: Homeowner's insurance to protect your property against damage, also typically paid via escrow.