Breaking Down The Mortgage Payment

“Ever wonder what actually makes up your monthly mortgage payment? Let’s break it down—quick and simple.
Most mortgage payments are made up of four parts, often called PITI.

First: Principal.
That’s the portion that pays down the balance of your loan.

Second: Interest.
This is the cost of borrowing the money from the lender.

Third: Taxes.
Your property taxes are usually collected monthly and held in escrow.

And fourth: Insurance.
That includes homeowners insurance—and sometimes mortgage insurance, depending on your loan.

​Put together, these four pieces make up your total monthly payment.
Understanding this breakdown helps you budget better and avoid surprises when buying or owning a home.