Principal
The portion of the payment that reduces the loan balance.
Mortgage payments
The mortgage payment is more than principal and interest.
Understanding every part of the housing payment makes it easier to compare loan structures and set a realistic homebuying budget.
Interest
The cost of borrowing based on the outstanding principal and loan rate.
Property taxes
Usually based on the property's assessed value and local tax structure.
Homeowners insurance
Property insurance is commonly included in the monthly escrow estimate.
Mortgage insurance
PMI, FHA MIP, or certain program fees may affect the payment depending on the loan structure.
HOA dues
Association dues are separate from the mortgage but still affect the total monthly housing expense.