Mortgage Calculator

Understanding Your Mortgage Payment (skip to your personalized Amortization Schedule)

A typical mortgage payment isn’t just made up of the loan amount and the interest – it involves other charges as well. Here’s a breakdown of the key components:

• Principal: The base amount that you borrow from your lender. Each mortgage payment you make will decrease this principal amount.
• Interest: The cost charged by your lender for lending you the money, expressed as an annual percentage of the loan amount.
• Property Taxes: The yearly tax levied by your local government on your property. A portion of this tax is usually paid with each mortgage payment.
• Homeowners Insurance: This insurance policy covers any potential damages or losses (e.g., due to fire, theft, or natural disasters). Similar to property taxes, you pay a part of your annual premium every month.
• Mortgage Insurance: If your down payment is less than 20% of your home’s purchase price, you’ll likely have to pay for mortgage insurance. This protects your lender in case you default on your payments. However, once your property’s equity increases to 20%, you can cancel your mortgage insurance unless you have an FHA loan.
• Amortization Schedule: Shows the division of each payment into principal, interest, taxes, insurance, and fees, and how your balance decreases over time.