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A mortgage payment comprises multiple costs and functions in a specific manner. Your monthly payment includes repayment of the loan principal, plus monthly interest on the outstanding balance. Payments are amortized, meaning your monthly payment remains the same during the repayment period but the percentage of the payment that goes toward principal will increase as the outstanding mortgage balance decreases. Mortgage payments can also include prepayments of property taxes, homeowner's insurance, and monthly homeowner's association dues into an escrow account, managed by your lender. When those items are due, your lender will make the payment to the tax authority, insurance company, or homeowner's association. How do they all affect your finances? Use this calculator to find out.