What's in a Mortgage Payment?

Your total monthly payment may be divided among these four items.
cut heating costs significantly with energy audit

cut heating costs significantly with energy audit

From

House Crashers

By: Karin Beuerlein

As a homeowner, each month you’ll pay what feels like a punishing sum. Understanding the basic mechanics of the mortgage payment will help. Let's break it down:

  • Principal. This is an actual bit of the price of the house, a tiny chunk of the humongous loan you’re asking for. When you first start paying on a mortgage loan, the amount of principal you pay off each month is tiny. That’s because the bank wants its money first, which brings us to ...
  • Interest. What the bank charges you for loaning you the principal. Your first mortgage payments consist almost entirely of interest; the farther down the road you get, the more the payment skews toward the principal.
  • Private mortgage insurance (PMI). With some shrewd tactics and a little luck, you may be able to avoid this payment; if you can’t wriggle out of it, it can cost you as much as $250 a month.
  • Escrow. Most likely, you’ll pay an amount into this account every month that goes to pay your county property taxes, city property taxes and homeowners insurance. All these bills actually come due yearly, but you pay a little at a time to ease the pain, and the escrow company takes care of it for you.

Next Up

The Red Flags of Mortgage Fraud

With mortgage brokers like these, you don’t need enemies. Know how to protect yourself from a scam.

Things to Show Mortgage Lenders

Discover details about the personal, employment and financial information your mortgage broker will request.

Alternatives to the Traditional Mortgage

Figure out if you should sign on or steer clear of these financing trends.

Mind Your Marriage and Your Mortgage

When it comes to buying a home, married couples have all the advantages. With marriage being an option for more people now, see how it can change a mortgage.

Checklist: Essential Mortgage Documents

Gather these important documents before you visit your lender.

What's the Point? The Lowdown on Loan Fees

Confused by references to "points" on your mortgage settlement statement? Points are actually quite simple: they're fees, and they came by their name because they equal one percentage point of the loan amount.

When They Say No: Finding Mortgage Money

Lending guidelines have tightened, but getting a loan is still possible.

What to Do If You Can't Afford Your Mortgage

If you're having trouble paying your mortgage, remember there are options before you concede your home.

Building Mortgage Interest: More Tax Deductions and Incentives for Homeowners

Learn about the many tax advantages of homeownership, including special deductions and local incentives.

Bridging the Gap Between Mortgages

You have options if your house hasn't sold and you've already found a new home. Getting a short-term loan — or bridge loan — will ease the financial strain of having two mortgages.

On TV

6:30am | 5:30c
7am | 6c
7:30am | 6:30c

Flip or Flop

12pm | 11c

Flip or Flop

12:30pm | 11:30c

Flip or Flop

1pm | 12c

Flip or Flop

1:30pm | 12:30c

Flip or Flop

2:30pm | 1:30c

Flip or Flop

3:30pm | 2:30c

Flip or Flop

4:30pm | 3:30c

Flip or Flop

5:30pm | 4:30c

Flip or Flop

6:30pm | 5:30c

Flip or Flop

7:30pm | 6:30c
Tonight
Tonight

Flip or Flop

8pm | 7c

Flip or Flop

8:30pm | 7:30c

Flip or Flop

9:30pm | 8:30c

House Hunters

10pm | 9c

House Hunters

11pm | 10c

Flip or Flop

12am | 11c

Flip or Flop

12:30am | 11:30c

House Hunters

1am | 12c

Flip or Flop

3:30am | 2:30c

Stories We're Following

Shop This Look

Found a living space you love in HGTV's Photo Library? Get the look in your own home with products from Wayfair.

Follow Us Everywhere

Join the party! Don't miss HGTV in your favorite social media feeds.