Mortgage Calculator

Calculating your mortgage payment is a complex process that takes into consideration a variety of factors such as interest rates, mortgage insurance, and HOA fees among others. With the mortgage calculator, you can easily find out your monthly payment by inputting information such as the home price, down payment, interest rate, and potential HOA fees.

$
$ %
TAXES, INS, HOA & PMI

$ % / yr
$ % / yr
$ % / yr
%
 

$1,656.61

Monthly Principal & Interest
 

$1,656.61

Total Monthly Payment
 

100.00%

Loan-To-Value Ratio (LTV)
 
Loading chart. Please wait...
Dec, 2018 Nov, 2048
Loan Closing Loan Payoff


  Monthly Annual Total of 360 Payments
Principal $344 — $1,649 $344 — $18,419 $300,000
Interest $7 — $1,313 $469 — $15,631 $296,380
Property Taxes $0.00 $0 $0
Home Insurance $0.00 $0 $0
HOA Fees $0.00 $0 $0
PMI $0.00 $0 $0
Principal & Interest $1,656.61 $19,879 $596,380
PITI $1,656.61 $19,879 $596,380
Total $1,656.61 $19,879 $596,380

Amortization Schedule

Date Interest Principal Balance
Dec, 2018 $1,313 $344 $299,656
2018 $1,313 $344 $299,656
Jan, 2019 $1,311 $346 $299,310
Feb, 2019 $1,309 $347 $298,963
Mar, 2019 $1,308 $349 $298,614
Apr, 2019 $1,306 $350 $298,264
May, 2019 $1,305 $352 $297,913
Jun, 2019 $1,303 $353 $297,559
Jul, 2019 $1,302 $355 $297,205
Aug, 2019 $1,300 $356 $296,848
Sep, 2019 $1,299 $358 $296,490
Oct, 2019 $1,297 $359 $296,131
Nov, 2019 $1,296 $361 $295,770
Dec, 2019 $1,294 $363 $295,407
2019 $15,631 $4,249 $295,407
Jan, 2020 $1,292 $364 $295,043
Feb, 2020 $1,291 $366 $294,677
Mar, 2020 $1,289 $367 $294,310
Apr, 2020 $1,288 $369 $293,941
May, 2020 $1,286 $371 $293,570
Jun, 2020 $1,284 $372 $293,198
Jul, 2020 $1,283 $374 $292,824
Aug, 2020 $1,281 $376 $292,449
Sep, 2020 $1,279 $377 $292,071
Oct, 2020 $1,278 $379 $291,693
Nov, 2020 $1,276 $380 $291,312
Dec, 2020 $1,274 $382 $290,930
2020 $15,402 $4,477 $290,930
Jan, 2021 $1,273 $384 $290,546
Feb, 2021 $1,271 $385 $290,161
Mar, 2021 $1,269 $387 $289,774
Apr, 2021 $1,268 $389 $289,385
May, 2021 $1,266 $391 $288,994
Jun, 2021 $1,264 $392 $288,602
Jul, 2021 $1,263 $394 $288,208
Aug, 2021 $1,261 $396 $287,812
Sep, 2021 $1,259 $397 $287,415
Oct, 2021 $1,257 $399 $287,016
Nov, 2021 $1,256 $401 $286,615
Dec, 2021 $1,254 $403 $286,212
2021 $15,161 $4,718 $286,212
Jan, 2022 $1,252 $404 $285,808
Feb, 2022 $1,250 $406 $285,401
Mar, 2022 $1,249 $408 $284,993
Apr, 2022 $1,247 $410 $284,584
May, 2022 $1,245 $412 $284,172
Jun, 2022 $1,243 $413 $283,759
Jul, 2022 $1,241 $415 $283,344
Aug, 2022 $1,240 $417 $282,927
Sep, 2022 $1,238 $419 $282,508
Oct, 2022 $1,236 $421 $282,087
Nov, 2022 $1,234 $422 $281,665
Dec, 2022 $1,232 $424 $281,240
2022 $14,908 $4,972 $281,240
Jan, 2023 $1,230 $426 $280,814
Feb, 2023 $1,229 $428 $280,386
Mar, 2023 $1,227 $430 $279,956
Apr, 2023 $1,225 $432 $279,524
May, 2023 $1,223 $434 $279,091
Jun, 2023 $1,221 $436 $278,655
Jul, 2023 $1,219 $437 $278,218
Aug, 2023 $1,217 $439 $277,778
Sep, 2023 $1,215 $441 $277,337
Oct, 2023 $1,213 $443 $276,894
Nov, 2023 $1,211 $445 $276,448
Dec, 2023 $1,209 $447 $276,001
2023 $14,640 $5,239 $276,001
Jan, 2024 $1,208 $449 $275,552
Feb, 2024 $1,206 $451 $275,101
Mar, 2024 $1,204 $453 $274,648
Apr, 2024 $1,202 $455 $274,193
May, 2024 $1,200 $457 $273,736
Jun, 2024 $1,198 $459 $273,277
Jul, 2024 $1,196 $461 $272,816
Aug, 2024 $1,194 $463 $272,353
Sep, 2024 $1,192 $465 $271,888
Oct, 2024 $1,190 $467 $271,421
Nov, 2024 $1,187 $469 $270,952
Dec, 2024 $1,185 $471 $270,480
2024 $14,358 $5,521 $270,480
Jan, 2025 $1,183 $473 $270,007
Feb, 2025 $1,181 $475 $269,532
Mar, 2025 $1,179 $477 $269,054
Apr, 2025 $1,177 $479 $268,575
May, 2025 $1,175 $482 $268,093
Jun, 2025 $1,173 $484 $267,610
Jul, 2025 $1,171 $486 $267,124
Aug, 2025 $1,169 $488 $266,636
Sep, 2025 $1,167 $490 $266,146
Oct, 2025 $1,164 $492 $265,654
Nov, 2025 $1,162 $494 $265,159
Dec, 2025 $1,160 $497 $264,663
2025 $14,062 $5,818 $264,663
Jan, 2026 $1,158 $499 $264,164
Feb, 2026 $1,156 $501 $263,663
Mar, 2026 $1,154 $503 $263,160
Apr, 2026 $1,151 $505 $262,655
May, 2026 $1,149 $507 $262,147
Jun, 2026 $1,147 $510 $261,637
Jul, 2026 $1,145 $512 $261,126
Aug, 2026 $1,142 $514 $260,611
Sep, 2026 $1,140 $516 $260,095
Oct, 2026 $1,138 $519 $259,576
Nov, 2026 $1,136 $521 $259,055
Dec, 2026 $1,133 $523 $258,532
2026 $13,749 $6,131 $258,532
Jan, 2027 $1,131 $526 $258,006
Feb, 2027 $1,129 $528 $257,479
Mar, 2027 $1,126 $530 $256,949
Apr, 2027 $1,124 $532 $256,416
May, 2027 $1,122 $535 $255,881
Jun, 2027 $1,119 $537 $255,344
Jul, 2027 $1,117 $539 $254,805
Aug, 2027 $1,115 $542 $254,263
Sep, 2027 $1,112 $544 $253,719
Oct, 2027 $1,110 $547 $253,172
Nov, 2027 $1,108 $549 $252,623
Dec, 2027 $1,105 $551 $252,072
2027 $13,419 $6,460 $252,072
Jan, 2028 $1,103 $554 $251,518
Feb, 2028 $1,100 $556 $250,962
Mar, 2028 $1,098 $559 $250,403
Apr, 2028 $1,096 $561 $249,842
May, 2028 $1,093 $564 $249,278
Jun, 2028 $1,091 $566 $248,712
Jul, 2028 $1,088 $568 $248,144
Aug, 2028 $1,086 $571 $247,573
Sep, 2028 $1,083 $573 $246,999
Oct, 2028 $1,081 $576 $246,423
Nov, 2028 $1,078 $579 $245,845
Dec, 2028 $1,076 $581 $245,264
2028 $13,071 $6,808 $245,264
Jan, 2029 $1,073 $584 $244,680
Feb, 2029 $1,070 $586 $244,094
Mar, 2029 $1,068 $589 $243,505
Apr, 2029 $1,065 $591 $242,914
May, 2029 $1,063 $594 $242,320
Jun, 2029 $1,060 $596 $241,724
Jul, 2029 $1,058 $599 $241,125
Aug, 2029 $1,055 $602 $240,523
Sep, 2029 $1,052 $604 $239,919
Oct, 2029 $1,050 $607 $239,312
Nov, 2029 $1,047 $610 $238,702
Dec, 2029 $1,044 $612 $238,090
2029 $12,705 $7,174 $238,090
Jan, 2030 $1,042 $615 $237,475
Feb, 2030 $1,039 $618 $236,857
Mar, 2030 $1,036 $620 $236,237
Apr, 2030 $1,034 $623 $235,614
May, 2030 $1,031 $626 $234,988
Jun, 2030 $1,028 $629 $234,359
Jul, 2030 $1,025 $631 $233,728
Aug, 2030 $1,023 $634 $233,094
Sep, 2030 $1,020 $637 $232,457
Oct, 2030 $1,017 $640 $231,818
Nov, 2030 $1,014 $642 $231,175
Dec, 2030 $1,011 $645 $230,530
2030 $12,320 $7,560 $230,530
Jan, 2031 $1,009 $648 $229,882
Feb, 2031 $1,006 $651 $229,231
Mar, 2031 $1,003 $654 $228,577
Apr, 2031 $1,000 $657 $227,921
May, 2031 $997 $659 $227,261
Jun, 2031 $994 $662 $226,599
Jul, 2031 $991 $665 $225,934
Aug, 2031 $988 $668 $225,266
Sep, 2031 $986 $671 $224,595
Oct, 2031 $983 $674 $223,921
Nov, 2031 $980 $677 $223,244
Dec, 2031 $977 $680 $222,564
2031 $11,913 $7,966 $222,564
Jan, 2032 $974 $683 $221,881
Feb, 2032 $971 $686 $221,195
Mar, 2032 $968 $689 $220,506
Apr, 2032 $965 $692 $219,814
May, 2032 $962 $695 $219,119
Jun, 2032 $959 $698 $218,421
Jul, 2032 $956 $701 $217,720
Aug, 2032 $953 $704 $217,016
Sep, 2032 $949 $707 $216,309
Oct, 2032 $946 $710 $215,599
Nov, 2032 $943 $713 $214,885
Dec, 2032 $940 $716 $214,169
2032 $11,485 $8,395 $214,169
Jan, 2033 $937 $720 $213,449
Feb, 2033 $934 $723 $212,726
Mar, 2033 $931 $726 $212,000
Apr, 2033 $928 $729 $211,271
May, 2033 $924 $732 $210,539
Jun, 2033 $921 $736 $209,804
Jul, 2033 $918 $739 $209,065
Aug, 2033 $915 $742 $208,323
Sep, 2033 $911 $745 $207,578
Oct, 2033 $908 $748 $206,829
Nov, 2033 $905 $752 $206,078
Dec, 2033 $902 $755 $205,322
2033 $11,033 $8,846 $205,322
Jan, 2034 $898 $758 $204,564
Feb, 2034 $895 $762 $203,803
Mar, 2034 $892 $765 $203,038
Apr, 2034 $888 $768 $202,269
May, 2034 $885 $772 $201,498
Jun, 2034 $882 $775 $200,722
Jul, 2034 $878 $778 $199,944
Aug, 2034 $875 $782 $199,162
Sep, 2034 $871 $785 $198,377
Oct, 2034 $868 $789 $197,588
Nov, 2034 $864 $792 $196,796
Dec, 2034 $861 $796 $196,000
2034 $10,557 $9,322 $196,000
Jan, 2035 $858 $799 $195,201
Feb, 2035 $854 $803 $194,399
Mar, 2035 $850 $806 $193,593
Apr, 2035 $847 $810 $192,783
May, 2035 $843 $813 $191,970
Jun, 2035 $840 $817 $191,153
Jul, 2035 $836 $820 $190,333
Aug, 2035 $833 $824 $189,509
Sep, 2035 $829 $828 $188,681
Oct, 2035 $825 $831 $187,850
Nov, 2035 $822 $835 $187,015
Dec, 2035 $818 $838 $186,177
2035 $10,056 $9,823 $186,177
Jan, 2036 $815 $842 $185,335
Feb, 2036 $811 $846 $184,489
Mar, 2036 $807 $849 $183,640
Apr, 2036 $803 $853 $182,786
May, 2036 $800 $857 $181,929
Jun, 2036 $796 $861 $181,069
Jul, 2036 $792 $864 $180,204
Aug, 2036 $788 $868 $179,336
Sep, 2036 $785 $872 $178,464
Oct, 2036 $781 $876 $177,588
Nov, 2036 $777 $880 $176,709
Dec, 2036 $773 $884 $175,825
2036 $9,528 $10,352 $175,825
Jan, 2037 $769 $887 $174,938
Feb, 2037 $765 $891 $174,047
Mar, 2037 $761 $895 $173,151
Apr, 2037 $758 $899 $172,252
May, 2037 $754 $903 $171,349
Jun, 2037 $750 $907 $170,442
Jul, 2037 $746 $911 $169,531
Aug, 2037 $742 $915 $168,616
Sep, 2037 $738 $919 $167,698
Oct, 2037 $734 $923 $166,775
Nov, 2037 $730 $927 $165,848
Dec, 2037 $726 $931 $164,917
2037 $8,971 $10,909 $164,917
Jan, 2038 $722 $935 $163,982
Feb, 2038 $717 $939 $163,042
Mar, 2038 $713 $943 $162,099
Apr, 2038 $709 $947 $161,152
May, 2038 $705 $952 $160,200
Jun, 2038 $701 $956 $159,244
Jul, 2038 $697 $960 $158,284
Aug, 2038 $692 $964 $157,320
Sep, 2038 $688 $968 $156,352
Oct, 2038 $684 $973 $155,379
Nov, 2038 $680 $977 $154,403
Dec, 2038 $676 $981 $153,421
2038 $8,384 $11,495 $153,421
Jan, 2039 $671 $985 $152,436
Feb, 2039 $667 $990 $151,446
Mar, 2039 $663 $994 $150,452
Apr, 2039 $658 $998 $149,454
May, 2039 $654 $1,003 $148,451
Jun, 2039 $649 $1,007 $147,444
Jul, 2039 $645 $1,012 $146,432
Aug, 2039 $641 $1,016 $145,417
Sep, 2039 $636 $1,020 $144,396
Oct, 2039 $632 $1,025 $143,371
Nov, 2039 $627 $1,029 $142,342
Dec, 2039 $623 $1,034 $141,308
2039 $7,766 $12,113 $141,308
Jan, 2040 $618 $1,038 $140,270
Feb, 2040 $614 $1,043 $139,227
Mar, 2040 $609 $1,047 $138,179
Apr, 2040 $605 $1,052 $137,127
May, 2040 $600 $1,057 $136,070
Jun, 2040 $595 $1,061 $135,009
Jul, 2040 $591 $1,066 $133,943
Aug, 2040 $586 $1,071 $132,873
Sep, 2040 $581 $1,075 $131,797
Oct, 2040 $577 $1,080 $130,717
Nov, 2040 $572 $1,085 $129,633
Dec, 2040 $567 $1,089 $128,543
2040 $7,114 $12,765 $128,543
Jan, 2041 $562 $1,094 $127,449
Feb, 2041 $558 $1,099 $126,350
Mar, 2041 $553 $1,104 $125,246
Apr, 2041 $548 $1,109 $124,137
May, 2041 $543 $1,114 $123,024
Jun, 2041 $538 $1,118 $121,905
Jul, 2041 $533 $1,123 $120,782
Aug, 2041 $528 $1,128 $119,654
Sep, 2041 $523 $1,133 $118,521
Oct, 2041 $519 $1,138 $117,383
Nov, 2041 $514 $1,143 $116,240
Dec, 2041 $509 $1,148 $115,092
2041 $6,428 $13,451 $115,092
Jan, 2042 $504 $1,153 $113,939
Feb, 2042 $498 $1,158 $112,780
Mar, 2042 $493 $1,163 $111,617
Apr, 2042 $488 $1,168 $110,449
May, 2042 $483 $1,173 $109,276
Jun, 2042 $478 $1,179 $108,097
Jul, 2042 $473 $1,184 $106,913
Aug, 2042 $468 $1,189 $105,724
Sep, 2042 $463 $1,194 $104,530
Oct, 2042 $457 $1,199 $103,331
Nov, 2042 $452 $1,205 $102,127
Dec, 2042 $447 $1,210 $100,917
2042 $5,704 $14,175 $100,917
Jan, 2043 $442 $1,215 $99,702
Feb, 2043 $436 $1,220 $98,481
Mar, 2043 $431 $1,226 $97,256
Apr, 2043 $425 $1,231 $96,024
May, 2043 $420 $1,237 $94,788
Jun, 2043 $415 $1,242 $93,546
Jul, 2043 $409 $1,247 $92,299
Aug, 2043 $404 $1,253 $91,046
Sep, 2043 $398 $1,258 $89,788
Oct, 2043 $393 $1,264 $88,524
Nov, 2043 $387 $1,269 $87,254
Dec, 2043 $382 $1,275 $85,980
2043 $4,942 $14,937 $85,980
Jan, 2044 $376 $1,280 $84,699
Feb, 2044 $371 $1,286 $83,413
Mar, 2044 $365 $1,292 $82,121
Apr, 2044 $359 $1,297 $80,824
May, 2044 $354 $1,303 $79,521
Jun, 2044 $348 $1,309 $78,212
Jul, 2044 $342 $1,314 $76,898
Aug, 2044 $336 $1,320 $75,578
Sep, 2044 $331 $1,326 $74,252
Oct, 2044 $325 $1,332 $72,920
Nov, 2044 $319 $1,338 $71,582
Dec, 2044 $313 $1,343 $70,239
2044 $4,139 $15,741 $70,239
Jan, 2045 $307 $1,349 $68,890
Feb, 2045 $301 $1,355 $67,534
Mar, 2045 $295 $1,361 $66,173
Apr, 2045 $290 $1,367 $64,806
May, 2045 $284 $1,373 $63,433
Jun, 2045 $278 $1,379 $62,054
Jul, 2045 $271 $1,385 $60,669
Aug, 2045 $265 $1,391 $59,278
Sep, 2045 $259 $1,397 $57,880
Oct, 2045 $253 $1,403 $56,477
Nov, 2045 $247 $1,410 $55,068
Dec, 2045 $241 $1,416 $53,652
2045 $3,292 $16,587 $53,652
Jan, 2046 $235 $1,422 $52,230
Feb, 2046 $229 $1,428 $50,802
Mar, 2046 $222 $1,434 $49,367
Apr, 2046 $216 $1,441 $47,927
May, 2046 $210 $1,447 $46,480
Jun, 2046 $203 $1,453 $45,027
Jul, 2046 $197 $1,460 $43,567
Aug, 2046 $191 $1,466 $42,101
Sep, 2046 $184 $1,472 $40,629
Oct, 2046 $178 $1,479 $39,150
Nov, 2046 $171 $1,485 $37,664
Dec, 2046 $165 $1,492 $36,173
2046 $2,400 $17,479 $36,173
Jan, 2047 $158 $1,498 $34,674
Feb, 2047 $152 $1,505 $33,169
Mar, 2047 $145 $1,511 $31,658
Apr, 2047 $139 $1,518 $30,140
May, 2047 $132 $1,525 $28,615
Jun, 2047 $125 $1,531 $27,084
Jul, 2047 $118 $1,538 $25,545
Aug, 2047 $112 $1,545 $24,001
Sep, 2047 $105 $1,552 $22,449
Oct, 2047 $98 $1,558 $20,891
Nov, 2047 $91 $1,565 $19,325
Dec, 2047 $85 $1,572 $17,753
2047 $1,460 $18,419 $17,753
Jan, 2048 $78 $1,579 $16,174
Feb, 2048 $71 $1,586 $14,589
Mar, 2048 $64 $1,593 $12,996
Apr, 2048 $57 $1,600 $11,396
May, 2048 $50 $1,607 $9,789
Jun, 2048 $43 $1,614 $8,175
Jul, 2048 $36 $1,621 $6,555
Aug, 2048 $29 $1,628 $4,927
Sep, 2048 $22 $1,635 $3,292
Oct, 2048 $14 $1,642 $1,649
Nov, 2048 $7 $1,649 $0
2048 $469 $17,753 $0

Frequently Asked Questions

What is a mortgage?

A mortgage is a type of loan you use to buy a home or to refinance your existing home. By getting a mortgage, you do not need to pay the entire price of the property in one full payment but agree to make payments on that loan for a set number of years until the value of the home is paid off.

How to get a mortgage?

A mortgage can be obtained through a financial institution such as a bank, credit union, or specialized mortgage lender. You can get pre-qualified for a mortgage or apply at a time you are ready to buy. The lender will check your credit score and history and employment history to make their decision.

How much mortgage can I afford?

Determining how much mortgage you can afford depends on a variety of factors such as your income, expenses, credit history, and existing debt. By taking into account all of those numbers, you can easily calculate how much of a mortgage payment you can afford at your current income.

What is mortgage insurance?

Mortgage insurance is an insurance policy that is designed to protect the lender if the borrower is not able to meet their contractual obligations of making regular payments or defaults on a loan. The private mortgage insurance offsets the losses the lender might face and reduces risk.

What are the points on a mortgage?

Points are fees paid to a lender upfront in exchange for a lower interest rate on your mortgage loan. The lender agrees to reduce the closing costs of purchasing the property in exchange for a higher interest rate. If you purchase “discount points” your closing costs will be higher, but the interest rate lower for the life of the loan.

How to calculate a mortgage payment?

There is a complex formula that allows you to calculate your mortgage loan. The formula is as follows:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
M= Mortgage
P= Principal amount
I= Monthly interest rate (yearly rate divided by 12 months)
N= Number of monthly payments for the duration of the loan (15 years x 12 months = 180 payments)
We recommend using a mortgage calculator to easily calculate your mortgage payment.

What is a jumbo mortgage/loan?

A jumbo mortgage, commonly referred to as a jumbo loan, is used to finance amounts higher than the conventional loan limit. The amount financed is higher than the loan limit set by the Federal Housing Finance Agency.

How to pay off a mortgage faster?

There are quite a few ways in which one can pay off their mortgage earlier than their set loan date. One of the most obvious ways is paying a higher amount on your mortgage than has been calculated and therefore reducing the amount of interest you pay in the long run. Another way to pay off a mortgage faster is to make your loan payment bi-weekly, resulting in an additional payment in a year.

What is an FHA loan?

An FHA loan is a mortgage loan that is insured by the Federal Housing Association. An FHA loan allows for individuals to close on a property with a down payment as low as 3.5%. FHA loans are considered a type of federal assistance for first time and returning home buyers.

What is a home equity loan?

A home equity loan uses the value of your current property as collateral. A home equity loan is issued as a lump-sum and is determined based on the current value of your home. The value is decided by an appraiser from the lending institution your loan will be provided by.

What is a conventional loan/mortgage?

A conventional loan is not backed by a government agency such as the FHA and is in turn solely provided by a private lender. This loan is not insured by the government and therefore may have stricter qualification requirements.

Definitions

Home Price

The home price is the cost of the property that the homebuyer decides to purchase. Home price varies by location, size of the home, and land, as well as the quality of the home and improvements made to the property. Home prices also fluctuate with the real estate market. The price of the house will determine the mortgage loan amount as well as the down payment.

Down Payment

A down payment is a percentage of the value of the home that is made upfront in a lump-sum cash payment. The down payment when purchasing a home varies depending on the price of the home and the financial ability of the homebuyer to pay. The standard down payment percentage is 20%, however, certain loans allow for a down payment much lower than that, in some cases as low as 0% (VA Loan) or 3.5% (FHA Loan).

Interest Rate

Interest rate, also known as a mortgage rate, is the rate of interest that is charged on the mortgage. The interest rate on a home loan can be fixed or variable, fluctuating with the current mortgage rates. Mortgage rates will vary for each borrower as they are heavily influenced by the homebuyer’s credit profile. As mortgage rates fluctuate with the real estate market, you can refinance your loan at a lower interest rate at a point in the loan term.

Loan Term

The loan term is the number of years you will be making your monthly mortgage payments towards your loan. The loan term may change during the loan life depending on whether the buyer decides to refinance the loan, make additional payments, or make more than the minimum monthly payment. Loan terms depend on the lender, interest rate, and the preference of the home buyer.

Property Taxes

Property taxes are paid by the owner of a home or property and are collected by the local government to fund services such as law enforcement, highway construction, and education. Property taxes are based on the value of the property including the land. Property taxes are calculated by the local government where the home is located.

Home Insurance

Home insurance is a type of property insurance that covers the losses and potential damages that your residence may face. The homeowner insurance, similarly to car insurance, provides liability coverage in case of an accident that may impact the residence or property. This type of insurance covers both the exterior damage to the property as well as damage to the interior and assets such as furniture. Home insurance is not the same thing as Private Mortgage Insurance and they serve different functions.

HOA Fees

Homeowners Association Fee, typically referred to as HOA fee, is a sum of money paid monthly by homeowners in certain types of properties such as condominiums and townhouse residences. These fees are collected to offset the cost of maintaining the building, facilities, and common areas such as a pool or fitness center. Some HOA fees even cover garbage disposal and utilities such as water and sewer fees. HOA is also required to have reserved funds for emergency high-cost expenses such as roof repair or potential property damage from a natural disaster.

PMI

If the buyer decides to put down less than the standard 20% down payment recommended, they are required to purchase Private Mortgage Insurance (PMI). Private mortgage insurance is a percentage of the loan amount. When a buyer decides to have a down payment lesser than 20% the loan to value ratio is higher than 80%, therefore presenting a higher risk for the lender. PMI reduces that risk for the lender. Homeowners are required to have PMI until they pay off 20% of the value of the property.

LTV (Loan-To-Value)

Loan-To-Value is an assessment of lending risk that lenders use to determine whether or not they will approve the mortgage loan for a potential home buyer. Loan assessments with higher LTV ratios are considered higher risk and may include higher interest rates for the homebuyer. Lower LTV means that a higher down payment was made and therefore the risk of the buyer defaulting on the loan is lower, resulting in lower interest rates. LTV is calculated by taking the mortgage amount and dividing it by the appraised property value.

Principal

The principal is the actual balance of the loan excluding any interest payments, taxes, or insurance. It is the original amount that was borrowed from the lender and had interest applied to it as well as other costs of borrowing such as taxes and PMI. The principal will be the amount of money you must pay until the loan is completely paid off, however, due to the amortization schedule, the initial payments are directed towards the interest before they are to the principal.

Interest

Interest is the number one cost of borrowing and is calculated at a percentage of the principal amount of the loan. Due to the fact that interest compounds, the majority of the initial payments are applied towards the interest rather than the principal balance. This causes homebuyers to apply extra payments to their loan, to decrease the compounding of the interest and reduce the sum of the loan they will pay.

PITI

Principal, interest, property taxes, and home insurance (PITI) are the sum four components of a monthly mortgage payment. Together they make up what homebuyers would traditionally refer to as their mortgage. PITI is used by both borrowers and lenders to determine the affordability of a property for the homebuyer. If the PITI amount is considered too high when compared to the monthly household income, the borrower is considered high credit risk and may not be approved for the mortgage loan.