Principal & interest
Principal repays the amount borrowed. Interest is the cost of borrowing. A fully amortizing fixed-rate loan has a scheduled principal-and-interest payment over its term.
Understanding your payment
A useful housing budget accounts for recurring costs alongside principal and interest.
Property taxes & insurance
Property taxes and homeowners insurance may be collected through an escrow account or paid separately. These costs can change over time.
Other housing costs
Mortgage insurance, HOA dues, maintenance, utilities, and other property expenses can affect your budget. Not every charge is included in your mortgage payment.
Compare official estimates
Use a lender-provided Loan Estimate to compare terms and closing costs. An online calculator is an illustration and cannot replace a loan review.