When you make your mortgage payment each month, it covers more than just principal and interest.
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What goes into a mortgage payment — a basic outline
There are 4 parts to a mortgage payment: principal, interest, taxes, and insurance, also called PITI.
- Principal. The amount of your payment that goes to pay down your loan balance.
- Interest. Cost to borrow money as a percentage of your principal loan amount.
- Taxes. Collected monthly to pay your property taxes, held in an escrow account.
- Insurance. Amount collected monthly to pay your homeowners insurance and mortgage insurance, if applicable, also held in an escrow account.
Information about escrow accounts

Video — The components of a mortgage payment
Learn more about what goes into your total monthly payment.
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