What goes into a mortgage payment
Lenders often describe a house payment with four letters: PITI. It stands for principal, interest, taxes and insurance. This calculator estimates all four so the number you see is close to what actually leaves your bank account each month.
| Feature | What it is | What changes it |
|---|---|---|
| Principal | The part that pays down your loan balance | Loan amount and term |
| Interest | The cost of borrowing the lender's money | Your rate, which depends on credit and loan type |
| Property taxes | Collected monthly and paid to the county | Your city, school district and assessed value |
| Homeowners insurance | Protects the home and is required by the lender | Coverage, deductible and the home itself |
Three ways to lower the payment
- Lower the amount you borrow. A larger down payment, or a grant such as the IMS Homebuyer Grant, reduces the loan balance.
- Improve the rate. Better credit and shopping multiple lenders through a broker can both lower your rate.
- Avoid monthly mortgage insurance. VA loans and some programs, like our 1% Down Mortgage, offer options without it.
