Mortgage Payment
The monthly payment made to a lender covering principal, interest, taxes, and insurance (PITI) on a home loan.
What is Mortgage Payment?
A mortgage payment is the recurring payment a borrower makes to their lender to repay a home loan. For most homeowners, the monthly payment consists of four components: principal (reducing the loan balance), interest (the cost of borrowing), property taxes (collected in escrow and paid to local governments), and homeowners insurance (collected in escrow). This is commonly abbreviated as PITI. Some payments also include private mortgage insurance (PMI) when the down payment was less than 20%, and homeowners association (HOA) fees. The principal and interest portion remains constant for fixed-rate mortgages but the tax and insurance escrow portion adjusts annually as rates change.
Example
A $400,000 30-year fixed mortgage at 6.8% has a principal and interest payment of $2,610/month. Adding property tax escrow ($600/month), homeowners insurance ($150/month), and PMI ($240/month) brings the total monthly mortgage payment to $3,600. When PMI cancels at 20% equity, the payment drops to $3,360.
Source: Consumer Financial Protection Bureau — Mortgage Payments