Articles on: Choosing your loan

How is my home loan payment determined?

Depending on your situation, there are typically three or four parts of your home loan payment:

Principal: Payment of your outstanding balance.
Interest: Payment of the interest charged on the outstanding balance.
Taxes: One-twelfth of your expected annual property taxes will be included in your home loan payment, and deposited into your escrow account.
Insurance: This includes homeowners insurance, as well as any other hazard insurances you're required to have, such as flood or windstorm. If you put less than 20% down on your loan, this can also include private mortgage insurance.

Based on these four items, your home loan payments are sometimes referred to as PITI.

Updated on: 07/07/2022